Retail shopping centers: who should HVAC maintenance typically fall on? Standard lease language usually calls for T to maintain; however, what is the risk if they don’t schedule routine maintenance and it impacts the life of the unit?
Thank you
[{"id": "h0mdq50", "text": "You could try amending the lease so that you are responsible for routine maintenance, which the tenant will reimburse you for. Allows you to control long term life of HVAC system while also getting financial benefit in the short term.", "replies": [{"id": "h0mjp6i", "text": "Smart! Thank you for it", "replies": [], "depth": 2}, {"id": "h0nmf76", "text": "I see this a lot and as a Prop Mgr, is the best for all parties involved I\u2019ve determined. \nIt\u2019s YOUR asset, HVAC and all. \nTenants put water and tear on the equipment so it make sense for the preventative maintenance (at minimum)is done, and possibly repairs. Of course it is passed back to the tenant through CAM. Relying on tenants to actually maintain is always asking for trouble. \nJust make sure lease language is clear about who is doing what and who is paying for what -saves a lot of headaches later", "replies": [], "depth": 2}], "depth": 1}, {"id": "h0mh82i", "text": "I've seen some require that the tenant have a maintenance contract with a reputable HVAC company and provide evidence of such.", "replies": [{"id": "h0n0s2m", "text": "This is how my leases are written. Some Ts require a Cap on reimbursements for HVAC. And that is easy to calculate and insert into the lease.", "replies": [], "depth": 2}, {"id": "h0n9g8j", "text": "Yes, lease should require a 3x annual maintenance contract. Do your own inspection with an HVAC contractor before giving back security deposit.", "replies": [], "depth": 2}], "depth": 1}, {"id": "h0mlo19", "text": "Tenant is required to send LL a copy of an executed service contract every year.", "replies": [], "depth": 1}, {"id": "h0mmgxg", "text": "HVAC maintenance is typically on Tenant. Lease should specify that Tenant needs to have a quarterly or semi-annual maintenance contract. If it's a small shop landlord I haven't seen them enforce it. If the unit then breaks the tenant can negotiate for the lndord to replace it (depends how many years left on the Lease Term). We typically split the cost with the Tenant. Makes them commit to the space and gives us the good will.\n\nIt's tough for smaller Tenants to replace a full commercial HVAC. \n\nI've also seen in Leases that Tenants will only be responsible for the first \"$1,000\" of repairs. Or something that Landlord will be responsible for maintenance for first 2 years etc..", "replies": [], "depth": 1}, {"id": "h0mmqz6", "text": "Tenant for sure, but the cost of a pleated filter, belt, and some chlorine tabs is incredibly cheap compared to a replacement RTU. We had the maintenance contract clause in our leases, but would still check and replace filters and belts as a part of our standard common area maintenance. Nationals were the only ones that ever actually maintained and serviced their RTUs, in my experience.", "replies": [], "depth": 1}, {"id": "h0mqrsx", "text": "We usually delivered the space with working HVAC when TT takes possession of space (TT signs off accepting delivery and we cover first x days/months).  Thereafter, TT is responsible for maintenance/repair.  Some properties, we contract out maint/repair and bill back TT.  Other properties, TT hires direct (require TT to provide evidence of routine maintenance).  Either way, you have to be careful the HVAC contractor does not puncture/damage the roof.  We have walking pads to all the units to minimize damage.", "replies": [], "depth": 1}, {"id": "h0mtfdo", "text": "I\u2019m guessing your talking single tenant, not multi?", "replies": [{"id": "h0p64qt", "text": "Multi, it\u2019s a shopping center.", "replies": [{"id": "h0pd9n7", "text": "In Canada I believe the large tenants will be responsible for their own units. The CRU\u2019s typically have HVAC unit maintenance done by the landlord but recovered from the tenants as part of the CAM recovery (through straight cost recovery or amortization depending on the nature of expense).", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "h0mvajw", "text": "Tenant is responsible for annual maintenance and repair up to a certain dollar amount (typically $500 per incident or $1000 per year) is what I\u2019ve seen - Speaking as both a tenant and a LL", "replies": [], "depth": 1}, {"id": "h0n591e", "text": "Maintenance up to $400 to $500 should fall on the tenant.", "replies": [], "depth": 1}, {"id": "h0nkjce", "text": "In instances like this, I always fall back onto the advice the first property manager I worked gave me.\n\nIt went something like this - \"you're not an attorney, so don't try to think like one.  You're a regular guy like everyone else, so just read the lease that way.  According to a plain, regular reading of the lease, who is responsible?\"\n\nTenant and landlord responsibilities are usually clearly defined in leases.  If the tenant is responsible for maintaining the HVAC unit, the lease will clearly say so.  If the lease doesn't assign the responsibility to the tenant, it's generally understood that the responsibility lies with the landlord.\n\nCaveat being, depends on how your property has been run up to this point, etc, but generally, if the tenant is required to do something specific, it's spelled out in the lease.", "replies": [{"id": "h0p5jl4", "text": "This is being decided to use in new leases moving forward.", "replies": [], "depth": 2}], "depth": 1}, {"id": "h0nyckq", "text": "All on you, without seeing your lease of course.\n\nGet a preventative maintenance contract with a reputable HVAC company to change filters, etc to extend the useful life.\n\nIf it\u2019s a lost cause, move or be prepared to pay a rent increase so your landlord can fix it with bubble gum and duct tape to justify the increase.", "replies": [{"id": "h0p5lrz", "text": "Im the LL in this case.", "replies": [], "depth": 2}], "depth": 1}, {"id": "h0oy1iu", "text": "Every strip center approaches this differently.  If the HVAC systems are separated by unit it's normal in a NNN lease the Tenant is responsible.  However, if the HAVC system is shared between more than one unit it can fall under CAM.\n\nEvery strip center differ.", "replies": [{"id": "h0p5ntj", "text": "Yes good point- thanks.", "replies": [], "depth": 2}], "depth": 1}, {"id": "h0pbni6", "text": "We decided a few years back to switch to tenant responsibility for HVAC filters. It was taking up a lot of time for our maintenance man. The problem is tenants just didn't do it and the units suffered. it was on us to replace units. We went back to LL replacing all HVAC filters.", "replies": [], "depth": 1}, {"id": "h0twy47", "text": "Here is Socal, we use the AIR lease which typically calls for 6 months of protection from the LL. We typically request 12-24 months depending upon product type. In either case, LL's I represent have an addendum calling for the T to keep a service contract where the HVAC unit is serviced annually OR the LL takes care of it and passes the $85-$125 cost thru to the T annually.", "replies": [], "depth": 1}]