From our friends at Five Star Property Management
Landlord or Tenant: Who’s Responsible for HVAC Service and Maintenance Needs?
Including HVAC (Heating, Ventilation, and Air Conditioning) service in a rental is good for both landlords and tenants. It makes the home more attractive to renters and landlords can charge more in rent. Tenants, on the other hand, value the convenience and are happy to avoid the additional costs of installing their own AC. However, when a rental home includes HVAC service, it also presents challenges to the property owner and the tenant, in terms of who is responsible for maintaining the systems.
Maintaining a home’s HVAC systems is not a minor affair because there are so many things to look after. HVAC systems will often require the following:
The common HVAC maintenance tasks are cleaning and replacing filters, lubricating moving parts, inspecting exhausts, maintaining drain pipes, checking and sustaining refrigerant levels, checking thermostat levels, maintaining electrical connections, and checking voltage.
HVAC systems will break down or malfunction from time to time, regardless of how well they are looked after. Repairs may be the result of the system’s age. Or can result from the weather. Other issues that cause HVAC malfunction are damage by pests, excess humidity, moisture infiltration, and encroaching plants.
Eventually, the HVAC system will need to be replaced. The average life expectancy of HVAC systems varies according to the parts of the systems. AC, furnaces, and boilers have a lifetime of 10-15 years, and water heaters last around 10-20 years (depending on the type). But the system may expire prematurely if it is not properly maintained. It costs more to replace the system than it does to repair or maintain it.
Who should be responsible for the HVAC?
First, the landlord owns the HVAC system and the responsibility to make sure that the home is livable. To be livable, a home must have an HVAC system that is working to the tenant’s satisfaction. However, after the landlord has provided the HVAC system and the tenant has confirmed that it is in good order, the question of future responsibility now arises. And there are different models for how the question can be answered.
As can be expected in these situations, both landlords and tenants would like to see all or most of the HVAC maintenance responsibilities handed to the other party. Tenants claim that landlords own the systems and should be in charge of maintenance. Landlords say tenants should maintain the systems since they use them and may be irresponsible in how they use the HVAC.
In this regard, both parties have valid points.
There are three approaches to dealing with this difference of opinions. Landlords can use:
- A model of shared responsibility
- A model where the tenant pays for all the maintenance
- A model where there are annual caps to what a tenant can spend
Under this arrangement, the tenant is responsible for all repair and maintenance of the systems, while the property owner is responsible for replacing them. This model is fairly straightforward but presents a major concern for landlords. How will they prevent tenants from failing to maintain the system and thereby forcing the landlord to replace it sooner?
The usual solution is to require tenants to have a contract with a qualified HVAC service company. By having a professional service company to maintain the systems, landlords ensure that filter changes, duct cleaning, and necessary maintenance are done as needed. Also, landlords may require the tenants to provide copies of the HVAC maintenance report.
The tenant is completely responsible
Naturally, this is the option favored by most landlords. Here the tenant is wholly responsible for maintenance, repairs, and replacement of the HVAC systems. But this model presents serious problems for tenants.
For instance, although replacing the system is the tenant’s responsibility, the newly-replaced HVAC is the landlord’s property. How should tenants resolve this problem?
If tenants feel that a unit is nearing the end of its useful life at the beginning of their lease, the tenant can request the landlord to install a new unit before they move in. If the landlord refuses to do this, then the property owner should give their guarantee that the system is in good working order. With regular maintenance and repair, a system in good working order should not need replacing until 10 years.
Capped maintenance spending
This is another model that is favored by tenants. Here, there are yearly limits to how much a tenant can spend on maintaining, repairing, or replacing the HVAC system. Once this annual limit is reached, all further maintenance, repair, and replacement costs are passed over to the landlord. In order to make this work, the tenant is usually required to have a contract with a professional HVAC maintenance company and make all maintenance records available to the landlord.
Which model is the best?
The best model depends on the specific needs and situation of a property. But as with most things in the landlord-tenant relationship, this one also requires communication, understanding, and openness from both parties.