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26.01.2023 | KPMG Law Insights

Commercial space rental and installation of electric charging stations

Electric vehicles are currently an essential part of the climate-friendly further development of road transport. For a long time now, registration figures for e-cars have been rising sharply. In many large cities, electrically powered buses now run alongside hydrogen-powered buses, and battery-powered cabs are also increasingly seen on the roads. More and more companies are providing their employees with electric vehicles as company cars. For both users and companies, however, the question often arises as to how easy access to charging options can be created.

Since the introduction of the Act on the Promotion and Modernization of the Condominium Ownership Act and the Amendment of Cost and Land Register Regulations (WEMoG) of October 15, 2020, the central provision for equipping buildings with charging facilities on the initiative of tenants has been Section 554 of the German Civil Code (BGB). According to this, a tenant can demand, among other things, that a landlord allow him to make structural changes to the rented property that serve to charge electrically powered vehicles. The legislator expressly did not intend to create a claim only for residential tenants, but due to the adaptation of the reference standard of § 578 para. 1 BGB is also a right for commercial tenants.
§ Section 554 of the German Civil Code grants the tenant not only a right to initial installation, but also a right to improvement or maintenance of an existing infrastructure. The prerequisite is that the tenant has been given a fixed parking space for use; the mere use of an area on the landlord’s property as a parking space without this having been agreed in the rental contract is not sufficient.

Weighing of interests required
If the leased property also includes parking spaces, the landlord may refuse consent pursuant to Section 554 para. 1 sentence 2 of the German Civil Code (BGB) only if the tenant cannot reasonably be expected to make the structural changes, even after considering the tenant’s interests. Consequently, there is no general obligation on the part of the landlord to give his consent; instead, the interests of both parties must be weighed against each other. Within the framework of the balancing of interests to be carried out, the legitimate interests of the tenant on the one hand and the interests of the landlord on the other hand are to be compared.

In addition to the creation of a charging option at the place of residence or business, tenants are likely to regularly cite climate and environmental protection concerns and the improvement in greenhouse gas and other pollutant emissions that will occur as a result of electromobility. Furthermore, commercial tenants in particular can additionally claim that offering a charging infrastructure improves their market position vis-à-vis competitors and makes them more attractive to employees and parking customers.

The landlord will regularly counter his interest in preservation with regard to the necessary substance interventions in the building structure. In addition, from the landlord’s point of view, the scope and duration of the measure, its approvability and the effects on the rights of use of any other tenants are of importance. If insufficient capacity is available for all tenants, a landlord may well refuse his consent to the measure of an individual tenant out of consideration for the others; however, the construction intentions of the other tenants must then already have been expressed (cf. LG München I, NZM 2022, 625). So it may be advisable for landlords who want to keep the construction activities in their building under control to ask for the installation requests as soon as possible – or even to act themselves and carry out an installation. It is also possible that the building’s existing power connection is not at all technically capable of accommodating a large number of charging devices, so that interventions going beyond the mere installation of a charging station would be required. However, it is not a reason for refusal for the landlord if he wants a certain provider for the charging stations and the tenant intends to cooperate with another (cf. LG München I, loc. cit.). General reservations about electromobility, sweeping fears or reference to a high fire risk with electric vehicles are also not sufficient for a refusal of consent (LG München I, IMR 2022, 3072).

Deconstruction and compensation
The landlord’s maintenance interest also includes the possibility that the charging infrastructure can be dismantled; as a rule, the tenant is obliged to do this for all structural changes made by him. The obligation to deconstruct includes the removal of all fixtures and the restoration of the original condition. However, a deconstruction demand by the landlord often appears to be contrary to good faith if, firstly, the landlord has agreed to the installation of the charging infrastructure without a removal reservation and, secondly, the value of the leased property has been permanently improved by the installation of the charging infrastructure. Thus, if the landlord does not expressly reserve the right to demand the removal of the charging infrastructure, a tenant may argue – insofar as the charging infrastructure was installed professionally and free of defects – that he does not have to remove it when the lease ends. The removal reservation should therefore be expressly declared and documented in writing (cf. OLG Frankfurt am Main, NJW-RR 1992, 396 (402), if landlord and tenant agree on details of the tenant’s installation.

If the charging infrastructure remains in the leased property, the question of compensation for the construction work in the form of compensation to the tenant almost inevitably arises. Landlords are generally not obliged to do this. However, there are exceptions: Unless there are contractual agreements to the contrary, a residential tenant is at liberty to remove the charging infrastructure, cf. section 539 para. 2 BGB. In such a case, the landlord may only avert the removal by paying reasonable compensation; moreover, the tenant may not have a legitimate interest in the removal. Landlords can therefore only effectively agree the exclusion of the right of removal vis-à-vis residential tenants if the tenant receives appropriate compensation, Section 552 para. 2 BGB (cf. Kammergericht, order of April 9, 2001, ref. 8 W 52/01). In commercial leases, on the other hand, the tenant’s right to remove the goods can be contractually excluded without compensation (see Braunschweig Regional Court, judgment of March 11, 2008, Case No. 6 O 1105/07).

Recommendations for action
Arguably, a landlord’s goal should be to coordinate the installation of a charging infrastructure at their property themselves in order to maintain control over providers and equipment. In this context, landlords willing to modernize should become active and look into the installation options. This also ensures that multiple tenants do not independently request the installation of different charging infrastructures, potentially requiring multiple interventions in the building fabric.

In addition, the installation of a charging infrastructure by the landlord is likely to be a regular modernization of the leased property that increases the utility value of the leased property. The landlord could then charge the costs incurred to residential tenants as part of a rent increase pursuant to Sections 559 et seq. BGB to residential tenants. Current commercial leases also provide for rent increase options for modernizations in commercial buildings. Of course, a landlord can also declare to a tenant that he is willing to bear the costs and then demand an increased rent as part of a modernization agreement. We are happy to assist with the drafting of sample leases and agreements for the installation of electric charging infrastructure.

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