The news that from 1
January 2015 repairs to air conditioning systems using the common refrigerant
R22 will be unlawful, is set to cause a chill in landlord and tenant
relationships as disputes arise over who should be responsible for and fund the
necessary works.
In
2004 EU Regulation 2037/2000 (replaced by European Regulation 1005/2009) (the
“Regulations”) made the use of R22 gas
in new air-conditioning systems illegal and from 1 January 2010 the use of new R22
gas when carrying out maintenance on
air-conditioning was made illegal.
The
next step of this phase out will commence in 2015 when the Regulations will mean
that the use of recycled R22 when carrying out maintenance on
air-conditioning will also be illegal. Therefore, from 1 January 2015, although
it will not be illegal to continue to use a system that contains R22, if that
system fails and requires any maintenance that would involve decanting or
replenishing the R22 gas, the repairs will be illegal and consequently many
systems will need to be replaced.
So
who is responsible for these works and who should pay for them? Well that all
depends on the specific wording of the lease but in most cases, unless the
tenant has a full repairing lease of the whole building, the landlord will be
responsible for any repairs/replacement needed but will (most likely) recover
the cost of doing so via the service charge.
However,
landlords in this position are still unlikely to recover all of their costs as
existing tenants, particularly those with only a few years of their terms
remaining, should be wary of large service charge increases to cover
replacement works and should look at the terms of their lease carefully to
establish whether this cost can be included and if so what proportion of it, considering
the length of the term remaining.
Tenants
entering into new leases need to be careful that they are not paying a premium
rent and taking on the responsibility and cost of replacing a R22 system before
2015 and those coming to the end of a lease need to ensure that they have
complied with their repairing covenant fully, particularly if exercising a
break clause where compliance is a condition. The cost of replacing R22 systems
is likely to be a key area of dispute when dealing with dilapidations claims/settlements
over the next couple of years. Tenants should be wary of, whilst Landlords
should hope for, wording such as it is the tenant’s responsibility not just to
repair equipment but to ‘maintain’, ‘service and keep up to date’ or keep it
in ‘good working order’.
It
is now the best time of the year to carry out repairs on air-conditioning
systems as they are unlikely to be in high demand in the cold weather so if you
are a Landlord or Tenant in a building that uses a R22 system we recommend that
you instruct an engineer to advise on whether partial or total replacement is
required, read through the terms of your lease carefully and start considering
replacement works today!
For more information
on this issue please follow the links below.
EGI Article ‘Don’t catch a Chill on R22’
http://www.egi.co.uk/news/article.aspx?id=758452
