As the deadline for the complete ban of the refrigerant gas R22 gets closer, Howes Percival urges commercial property landlords and tenants to check their leases to establish responsibility for upgrading or replacing air conditioning equipment which uses this environmentally harmful gas.
From 1 January 2015 it will be illegal to use the hydrochlorofluorocarbon (HCFC) gas R22 in either its newly produced ‘virgin’ or recycled form. R22 gas is a commonly used coolant in older air conditioning systems so its ban will have a significant impact as these systems will either have to be converted or replaced. The key question for landlords and tenants is who will pay?
Joanna Nicholls, commercial property law expert at Howes Percival explained: “Although the R22 gas ban doesn’t come into force until 2015, this isn’t a long period of time in relation to commercial property leases and the on-going repair and maintenance of buildings.
“Air conditioning systems are expensive to replace or convert so, who meets the costs of the R22 phase out will be of concern to landlords and tenants and both parties will need to look at measures to mitigate the cost implications well in advance of the deadline. The answer to who pays will lie in the wording of the lease and will depend on who is responsible for repair and/or to provide services under the lease, how the costs are dealt with in service change provisions and potentially how rent is reviewed. The implications of the impending ban should be taken into account with any new lease negotiations or lease renewals where the term goes beyond 2015.”