how many of you out there rent a commercial space? OR lease one?

Who is responsible for their HVAC? Yes... I know someones gonna say 'depends on what the lease says'....

but I know that... what I want to know is if you lease or are a landlord.. in YOUR contract.. what does it say... if you dont mind me asking...

Everyone I know who rents a commercial space has told me they are responsible for their HVAC... not the landlord... and I was wondering if it was a general if not universal rule for the tenant to be responsible...

just wondering..

It really does depend on the lease. What I see a lot of the time landlord will provide a 1 year warranty and the tenant maintains it the rest of the term

I own a commercial property with two tenants. The leases are set up as triple net, so the tenant is responsible for literally everything with the exclusions being structure and roof damage/repair. So to answer your question, the tenant is responsible for hvac, as well as every other aspect of the internals of the building. It's a standard lease, but I have come across a handful of triple net leases where the landlord is responsible for hvac. I run far away from those, obviously.

Yes, it's good to be a landlord. Until the economy tanks/changes and you can't get tenants. Then society loves to **** on you even more than they did when you are taking money from innocent businesses when they should be allowed to stay for free (I ran a business too, and that actually got **** on by society more than property owners, surprisingly, but that could be because it was in the most anti business city in the country, SF). We're evil, until we're broke, then we got what we deserved. Amiright?

jamesfitzgerald said:

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What I see a lot of the time landlord will provide a 1 year warranty and the tenant maintains it the rest of the term

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I've never once seen that, but I focus exclusively on healthcare for CRE. Any specific industry you see this in?

The HVAC, rood, electrical, and foundation are some of the the major items to deal with during the negotiation stage of a commercial lease. Many commercial tenants are excited at the thought of getting a commercial space so they just accept any term proposed by the landlord. This can be a big mistake. Negotiate these item on the front end and don't be scared to walk away from a lease opportunity.

I rent two different spaces. One has us paying for everything unless it's complete system replacement needed and then landlord pays. Problem with this is we have had to pay multiple fixes that just hold us over maybe another year. But it is what it is. Our 2nd location they wouldn't budge on HVAC repairs but we did get them to agree to pay for anything over $5k repairs in the first 2 years of a 5 yr lease.

Ultimately just gotta ask and get it in writing.

Our company leases and manages a large number of office, retail, and industrial properties. Retail property leases typically provide that the tenant is responsible for the HVAC system repairs and maintenance. Multi-tenant office buildings normally provide that the Landlord is responsible. Industrial leases usually require the tenant to have the responsibility.
Sometimes a retail tenant will negotiate language that requires the LL to pay for replacement of the HVAC unit when it craters.

For discussion, I think a distinction needs to me made in this thread about repairs versus replacement. I see a lot of leases and it is common for tenant to be responsible for maintenance and repair of the system. Replacement of the unit typically falls on the landlord. If a build to suit situation or substantial long term lease where there may be an absolute NNN agreement, then in that situation the tenant is responsible for all repairs and replacement. But, commonly on existing structures with non first generation tenants the agreement is for landlord to replace the hvac, when needed, and the tenant to maintain the daily function of the unit. Obviously, there is variation from lease to lease based on negotiation.

3 commercial properties

2 are triple net and tenant is responsible for everything except replacement

1 landlord is responsible for. This was an inherited lease from a purchase and by far our most "difficult" tenant but that is only in comparison to the other two. Requires more hands on/involvement. Really still not a bad deal.

Negotiate at the start of the lease but it isn't unusual and more likely in my experience that tenants are responsible for a large majority of the repairs including HVAC systems.

in mine tenant pays

Tenant usually pays and will also have to secure a contract with an HVAC company (approved by Landlord) to come visit the property at least once a quarter or something like that.

Mumbo Jimbo said:

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most leases indicate the tenant is responsible

it's good to be a commercial landlord

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This is the correct answer.

Commercial landlords are some of the biggest idiots I've ever dealt with in business.

I've started to own my own properties because I realized after dealing with these imbeciles for so many years it can't be hard.

Leases are all slanted in the landlords favor. Landlords are idiots but their attorneys are smart.

Typically leases will state that the tenant is responsible for the HVAC, especially for an industrial or office/warehouse.

I represent tenants and we generally get some concessions on HVAC, at least a warranty for 6-12 months, and we always request an HVAC inspection report so we know what the tenant is inheriting. Depending on the landlord you can sometimes get them to put a cap on your HVAC costs.

One of the biggest "got ya's" landlords have is that the lease will typically require the tenant to have a HVAC maintenance contract in place, and if they don't, then any responsibility the landlord did have is void.

Basically, if your about to renew, push for some kind of HVAC concessions, of if your lease is close to being up and your HVAC is going out, leverage that in renewal talks.

Our office lease is full service so our rent is inclusive of all repairs and utilities.

Utopia61 said:

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Our company leases and manages a large number of office, retail, and industrial properties. Retail property leases typically provide that the tenant is responsible for the HVAC system repairs and maintenance. Multi-tenant office buildings normally provide that the Landlord is responsible. Industrial leases usually require the tenant to have the responsibility.
Sometimes a retail tenant will negotiate language that requires the LL to pay for replacement of the HVAC unit when it craters.

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This is good info.

You can also always try to cap the dollar amount you are responsible for. If you're in a desirable location it probably won't work, but it never hurts to ask.

Westexas and utopia are correct.