Electric Vehicle Charging Stations: Keep your Condominium Association current!
Electric vehicles are increasing in popularity throughout the United States and create unique challenges for Michigan condominium associations, especially those that were created before electric vehicles were even contemplated. Experts project that by 2040, at least thirty-five percent of all new cars will have a plug. Accordingly, condominium associations will be forced to deal with issues relating to the charging of electric vehicles both now and well into the future. However, the vast majority of states, including Michigan, do not currently regulate the installation of electric vehicle charging stations. Accordingly, this article will provide information for Michigan condominium associations to consider when dealing with a request to install an electric vehicle charging station.
How are Electric Vehicles charged?
A. Level 1 Charging
Level 1 charging equipment provides electricity to the vehicle through a 120 volt alternating current plug. Level 1 charging is the easiest and most basic way to charge an electric vehicle as it allows for the vehicle to be charged by plugging a cord into an ordinary household electrical outlet. Level 1 charging equipment is standard on most electric vehicles. However, Level 1 charging is often inconvenient as it generally takes a much longer time to charge a vehicle. More specifically, Level 1 charging typically only provides 2-5 miles of driving range per hour of charging.
Permitting Level 1 charging is the easiest way for a condominium association to accommodate an individual co-owner’s request to charge an electric vehicle. In most instances, co-owners can simply plug their electric vehicles into their garages, as Level 1 charging typically only requires a 15 or 20-amp, single-pole breaker. As long as the unit is individually metered, and modifications do not need to be made to the common element electrical system, a condominium association will likely have minimal involvement with respect to Level 1 charging in a unit with an attached garage.
However, in situations where a co-owner plans to employ Level 1 charging in a general common element parking space, a condominium association will likely need to amend its governing documents or create rules and regulations concerning Level 1 charging of electric vehicles as will be discussed in more detail below.
B. Level 2 Charging
Level 2 charging equipment provides electricity to an electric vehicle through a 240 volt or 208 volt electrical service and is typically hardwired to the existing electrical systems. Level 2 charging can easily be installed in a garage or on a common element parking area, but it will typically require a co-owner to enter into a modification agreement to install. A Level 2 charging system requires the installation of charging equipment and a dedicated 20 to 80 amp circuit, even though it uses the same connector to attach to an electrical vehicle as a Level 1 charging system. A Level 2 charging system charges much faster than a Level 1 charging system and typically provides 10-20 miles of driving range per hour of charging.
In most instances, condominium associations can accommodate a co-owner request to install a Level 2 charging station in the co-owner’s unit. However, this typically requires the co-owner to submit detailed plans to the association for approval and having an engineer or electrician review the plans to ensure that the condominium association’s system can handle the Level 2 charging system. Many municipal codes encourage garages to be constructed with a 240 volt outlet on a dedicated circuit to accommodate Level 2 Charging. See Auburn Hills, Michigan, Zoning Ordinance, Section 1834.
C. Level 3 Charging/DC Charging
Level 3 charging equipment, commonly known as a DC Charging System, charges an electric vehicle through a 480 volt direct current (DC) plug. Unlike a Level 1 or Level 2 charging system, Level 3 charging systems are typically designed for outdoor use as they are commonly found in public fueling stations. A level 3 charging station is the fastest way to charge an electric vehicle and it can provide 180-240 miles of driving range per hour of charging.
Adding a Level 3 charging station is typically difficult and undesirable for a condominium association to accommodate. First, a Level 3 charging system may be undesirable because not all electric vehicles offer a Level 3 charging port. Second, owning and maintaining a Level 3 charging system is expensive and can sometimes cost upwards of $50,000 or more. Third, the existing electrical system has to be designed to handle a significantly higher electric load capacity. Accordingly, most Level 3 charging stations are located along interstate highways or in designated public charging areas. However, a Level 3 charging system could be effective if installed on a common parking lot to accommodate the charging of multiple electric vehicles in the same condominium association.
What should condominium associations consider when dealing with a request to install an electric vehicle charging station?
The Michigan Condominium Act, specifically, MCL 559.147(1) provides as follows:
(1) Subject to the prohibitions and restrictions in the condominium documents, a co-owner may make improvements or alterations within a condominium unit that do not impair the structural integrity of a structure or otherwise lessen the support of a portion of the condominium project. Except as provided in section 47a, a co-owner shall not do anything which would change the exterior appearance of a condominium unit or of any other portion of the condominium project except to the extent and subject to the conditions as the condominium documents may specify.
Accordingly, unless a co-owner is engaging in Level 1 Charging within their own unit, via an existing outlet, it is likely that a co-owner will need to obtain permission from the condominium association to alter the common elements and/or their unit to install a charging system. In determining whether to grant permission, condominium associations should consider the following:
How will the vehicle be charged?
Similar to other common element modifications, Michigan condominium associations should require an owner to submit proposed plans relating to the modification. Determining whether the proposed charging station is going to be a Level 1, Level 2 or Level 3 charging station is important. Level 1 charging already exists and is readily accessible for many co-owners. Issues relating to Level 1 charging stations that are located outside of a unit will typically relate to defining the responsibilities related to the use of the station, as installation is typically quite easy. Level 2 charging station requests will likely be most common due to the stark difference in charging times between Level 1 and Level 2 charging stations. In some instances, new multi-family homes may already include wiring that would support a Level 2 charging station. By way of example, the Auburn Hills, MI ordinance that is discussed above encourages, although it does not currently require, that all new one-family and multiple family homes with garages be constructed to provide a 220-240 volt / 40 amp outlet on a dedicated circuit to accommodate potential future hardwire installation of a Level 2 electric vehicle charging station as “retrofitting a home for electric vehicle charging is considerably more expensive than the cost of including the capacity at the time of construction.” See Auburn Hills, Michigan, Zoning Ordinance, Section 1834. Level 3 charging station requests will likely be the least common, as they are the most expensive and most difficult to install. Accordingly, after the association determines the proposed charging method, and a proposed set of plans is submitted for review, the next step is to engage an expert. However, prior to engaging an expert, the association should also evaluate the aesthetic impact on the condominium. Level 1 and Level 2 charging stations will likely have minimal aesthetic impact if they are merely attached to an existing wall. However, if erection of new structures or significant modifications to existing structures would be required, a condominium association should also determine the best location to place the electric vehicle charging station.
Has the condominium association hired sufficient experts to determine whether installation of an electric vehicle charging station will work with existing infrastructure?
Similar to other decisions made by the board of directors, in determining whether to permit or deny a request to install an electric vehicle charging station, the board of directors should consults experts. By way of example, in Michigan, the Michigan Nonprofit Corporation Act, specifically MCL 450.2541(1), requires a director to act in good faith and with the care of an ordinarily prudent person in a like position under the circumstances. In discharging their fiduciary duties, directors are entitled to rely on information, opinions, reports or statements prepared by a professional if it is within their expert competence. See e.g. MCL 450.2541(2). However, a director is not entitled to rely on such information if they have knowledge concerning the matter that makes reliance unwarranted. See e.g. MCL 450.2541(3).
In the context of a request to install an electric vehicle charging station, a board that is discharging its duty of good faith will consult with an attorney to determine the applicable requirements, whether they be statutory, a municipal ordinance, or imposed by the governing documents. Insurance agents should be consulted to determine what is covered under the association’s existing policy and what will be covered under a co-owner’s insurance policy. Additionally, most board members will not be electrical experts, therefore a licensed electrician, electrical engineer and/or the utility company should be consulted to review any plans. This is important to determine whether the condominium association’s existing infrastructure can accommodate the request without endangering the safety of the co-owners and whether the other co-owners will be required to pay increased costs.
How will responsibilities for the charging station be allocated?
After the board has obtained expert advice relating to the installation of an electric vehicle charging station, the board of directors should enter into a written modification agreement with the co-owner who will be using the charging station. The modification agreement should define the parameters relating to the installation and use of the charging station. Common issues that need to be addressed in a modification agreement are as follows:
1.Who will pay for the costs of electricity?
One of the most common problems encountered in these types of situations is how to calculate whether the co-owner is paying for their fair share of electricity. If possible, condominium associations should require the installation of a separate meter for the electric vehicle charging station if at all possible. If a single co-owner will be using the charging station, that co-owner can simply pay the cost of electricity. If multiple co-owners are using the charging station, the bill should be equitably split between those co-owners, unless the charging station is a general common element that can be used by all co-owners.
Adding a separate meter not only avoids disputes as to responsibility for cost, but may also reduce the co-owner’s electricity costs. For example, DTE Energy has a special PEV Rate for Level 2 Charging. After DTE installs a special PEV Meter, pricing plans are available that allow for flat fees or significantly reduced charges for off-peak use. Accordingly, having a separate meter installed for an electric vehicle may resolve issues related to cost allocation and may reduce the overall price of electricity.
2. Who is responsible for the maintenance and repair of the charging station?
In the vast majority of condominium association governing documents, the responsibility for maintaining and repairing the general common elements belongs to the association. Conversely, the responsibility for maintaining limited common elements and individual units typically belongs to the co-owner. However, if an electric vehicle charging station is not identified as a limited common element, a typical catch all provision in governing documents may indicate that it is a general common element. Accordingly, assuming that the governing documents allow for modification to the general common elements, an association should ensure that it is not taking on additional maintenance and repair responsibilities unless the charging station is available for use by all of the co-owners.
3. Who is responsible for insurance?
A condominium association is responsible for providing insurance on the common elements. In situations where an electric vehicle charging station is a general common element, that is available for use by all co-owners, it makes sense that the association should incur responsibility for insuring the risks associated with the charging station. However, if the charging station is only going to be utilized by a single co-owner, or a few co-owners, those co-owners should be required to pay the costs of insurance. With respect to installing the charging station, the Association should require the co-owner to hire a contractor that has a general commercial liability policy and appropriate worker’s compensation coverage. With respect to insuring the electric vehicle charging station after it is installed, a co-owner should be required to add coverage under their homeowner’s insurance policy and add the condominium association as a named insured on that policy.
4. Who is liable for damage caused by a charging station?
While condominium associations may have an interest in going “green” and keeping co-owners happy by accommodating reasonable requests to install electric vehicle charging stations, the condominium association should not be forced to bear the burden of the potential additional liability associated with an individual co-owner’s use of an electric vehicle charging station. A San Francisco based electric vehicle charging station manufacturer was recently named in a class action lawsuit involving claims that the manufacturer’s charging stations were overheating and melting during use. Given that electric vehicle charging stations can potentially cause damage to persons or property, condominium associations should ensure that the co-owner is required to defend, indemnify and hold harmless the condominium association from any potential liability.
Electric vehicle use is on the rise throughout the United States and most condominium associations will be forced to deal with issues related to electric vehicle charging stations in the near future, if they have not done so already. In states such as Michigan that do not have statutes regulating electric vehicle charging stations in condominium associations, failure to appropriately handle requests related to electric vehicle charging stations may lead to lawsuits and/or decrease property values as a result of bad publicity.
In conclusion, the following tips will be useful for condominium associations when dealing with requests to install charging stations:
1. Know the law. Determine if any local ordinances apply.
2. Be proactive instead of reactive. All condominium associations are likely to deal with this issue at some point and governing documents and rules and regulations should be evaluated prior to receiving a modification request to ensure that appropriate procedures are in place.
3. Consult with experts. Electric vehicles and electric vehicle charging stations are a relatively new technology. Most board members will not be experts in this area, and guidance from experts is necessary to ensure the safety.
Kevin Hirzel is a Partner and Chair of the Community Association and Real Estate Practice Group at CMDA. He concentrates his practice on commercial litigation, community association law, condominium law, construction law and real estate law. Mr. Hirzel has been a Super Lawyer’s Rising Star in Real Estate Law from 2013-2017, an award given to only 2.5% of the attorneys in Michigan each year. He was named an Up & Coming Lawyer by Michigan Lawyer’s Weekly in 2015, an award given to only 30 attorneys in Michigan each year. Mr. Hirzel represents builders, community associations, condominium associations, cooperatives, co-owners, developers, homeowner’s associations, investors, property owners and property managers throughout Michigan. He is available to represent clients out of CMDA’s Michigan offices in Clinton Township, Livonia, Grand Rapids or Traverse City. He may be reached at (734) 261-2400 or firstname.lastname@example.org.