Electric avenues

The Expert Eye
Over the last year, in Poland the number of electric vehicles registered has significantly increased and this has prompted a growing need for charging stations. This has become evident for both by tenants and landlords – who are increasingly thinking about having them installed

Such projects can also receive state subsidies as a part of the Polish government’s infrastructure support for electric vehicle charging and hydrogen tanking programme. But before an investor can sit down with a contractor to talk about building an electric vehicle charging station on their property, the building needs to be surveyed both from a legal and technical standpoint. The investor’s third-party contractual responsibilities also need to be scrutinised to identify circumstances that might affect these plans, as well as: the material and financial schedule, how long the work is going to take, and the costs of the project.

Legal due diligence

It might turn out that investors want to build an electric vehicle charging station on land that they do not have legal title to or where they have insufficient legal rights for the construction and use of such a charging station. In such cases, it is imperative to start negotiations with the land’s owner to ensure there is the legal entitlement for the purpose of building and using an electric vehicle charging station on to the property as well as for providing all the necessary technical infrastructure for the use of such a station in the future. For example, when it comes to the real estate ownership or usufruct for an office building, the property might actually end at the building’s external walls and, as a consequence, the outdoor car park where the landlord or the usufruct holder intends to install a charging station could actually lie on property owned by the local authorities or the state. As a result, the project schedule must, for example, include adequate time for the investor to negotiate a lease contract with the city and for the authorities to have sufficient time to prepare an announcement for the leasing of the property that the public can view over a period of 21 days. The installation of electric charging stations in car parks leased by a third party can also result in the investor being liable to the lessee when the work affects the investor’s responsibilities to that party. For this reason, before sitting down with the contractor it is worthwhile examining the contractual responsibilities already undertaken by the investor in order to establish whether contractual changes will be required or whether the agreement with the parties contracted for the construction and operation of the charging station will suffice. In this regard, particular attention needs to be applied to the agreement of third parties when a charging station is planned in a car park next to a shopping centre where the retail units that operate constitute separate properties. In such cases, the owners of such units, being co-owners of a communal property that usually includes the car park, often have legally defined management and usage terms for the shared property. As a result, when one owner wishes to build an electric charging station on shared property or on part of it that is not allocated for their own exclusive use, the agreement of all the other co-owners may be required for such tasks as the site management and construction of the station as well as for the possible redevelopment of the centre’s technical specifications and the appointment of contractors. It is also possible that an agreement will be needed for how the investment costs are to be shared between the retail unit owners as well as for changes to the management costs for the area where the charging station operates.

It also needs to be borne in mind that in such cases all the co-owners of a shared property where an electric charging station is to be located have to submit their agreement in writing for the construction work to take place on the shared property. In principle, constructing an EV charging station (with the exception of public transport road infrastructure) does not require a building permit, but it does require a submission to the proper architectural and construction authorities. However, a building permit is required if the charging station is to be installed in a building listed on the historic monuments register. In such cases, before applying for a construction permit, the permission of the relevant regional conservator must be obtained based on the statute governing the upkeep and conservation of monuments. However, if the installation of a charging site is in an area listed on the historic monuments register, a building permit is not required but the permission of the relevant regional conservator must be attached to the submission for the commencement of the work. When a charging station or its technical infrastructure is to be located next to a public road, permission may be required from the road management authority to take over a lane of traffic as well as to reorganise the road traffic so as to mark out appropriate parking spaces and distinguish them from spaces for other vehicles. Obtaining permission to occupy a lane from the public road authority requires the payment of a fee. Moreover, if the charging stations are to be used to display advertisements and placed in public areas, they will have to comply with the legal and administrative requirements governing the placement and use of advertising hoardings.

Technical due diligence

Before beginning negotiations with a contractor to build a charging station, the property’s electric installations need to be checked for whether they are suitable for the connection and use of such a station as well as the power reserves for the building. Such a check should take the form of an expert opinion by a person with the relevant construction design licence i.e. one without a restriction for electrical and electric power installations. The expert opinion may conclude that the construction and use of a charging station can take place after the reconstruction of the property’s existing electrical infrastructure. In such a situation the investor is obliged to bear the additional costs for the reconstruction of the electrical system. Moreover, in accordance with article 15 of the law on electrical mobility and alternative fuels of January 11th 2018 with amendments, before building a charging station an investor should apply to the President of the Office of Technical Oversight (UDT) for an opinion on the compliance of the technical documentation for the design of the station with technical requirements laid out by the law. The president of the UDT will issue an opinion within 30 days of the submission and a fee is chargeable for its issuance.

Before the station is handed over for use (including whenever it is modernised or repaired), the station has to be inspected by the Technical Oversight Office for safety. This body may issue a decision to prevent the usage of the charging point or the entire station due to its failure to meet the legal technical requirements. This inspection is also subject to a fee. Upon the completion of the construction work on the charging point, the operator of the distribution system has to install a meter and the investor or operator is required to draw up a contract for the distribution and sale of the electricity for the charging station. In the case of a charging station open to the public, it is also necessary to register it with the Ewidencja Infrastruktury Paliw Alternatywnych (EIPA).

Agreement with the contractor

When choosing a contractor, it’s necessary to consider what type of contract is going to be drawn up. This could involve a complex design contract to extend the existing technical infrastructure as well as a construction contract with the station to be handed over once the relevant tests, checks and technical inspections have been completed, which in principle gives the investor less to worry about in terms of the risks associated with the construction. This could also be a contract for a narrow range of tasks or several contracts with individual contractors for specified tasks. In the latter case it is necessary to consider appointing a supervisor for the contractors so that all the work can be completed as required and on schedule. The type of contract could oblige the investor to provide guarantees for the existing equipment and infrastructure operating on the given property and these could make the investor dependent on modifications to this infrastructure being made by a particular contractor.

With regard to the contract for the construction work, as well as the deadlines and the scope of the work, particular attention needs to be paid to the mechanisms for ensuring the requisite quality of the work, as well as such issues as the hiring of subcontractors, work safety, the liability for potential damages, the need to repair flaws and breakages, the safety of such repairs, guarantees of service and quality, and also the possibility of contract cancellations and disputes. In cases where the contractor is to be the operator of the charging station, the contract should also cover how the station is to operate and its dismantling once it has reached the end of its service life. Normal property insurance does not cover construction risk, so insurance policies need to be checked and the contractor should possibly be required to insure the construction work for the electric charging station against all construction risks (CAR) covering property damage and personal injury resulting from the work carried out by the contractor on the given property.

Moreover, before the work begins, the contractor should present the investor with an insurance policy covering civil responsibility for the performance of the work. When a contractor intends to hire a subcontractor, the construction contract should also specify the procedures for the choice, employment and payment of the subcontractor by the contractor in order to limit the investor’s risk in regard to the payment of the subcontractor. In such a case the insurance contract of the subcontractor should also cover the work of the subcontractor.

Finally, it is also worth bearing in mind that the handover procedure for the work and the documentation for the changes to the property’s technical infrastructure should be included in the contract with the contractor. When the charging station is to be the property of the investor, the contractor should also share or hand over to the investor guarantees for the charging station and give the investor usage and servicing instructions for the station.