The chilling issue of r22 air conditioning equipment

The recent heatwave has brought the issue of air conditioning back in to sharp focus, with many ageing systems either failing to cope or falling over completely.  The costs of repairing and re-gassing these systems with R22 refrigerant can be substantial.  Sometimes replacement with a new system may be the only option. If your lease terminates within the next 18 months you may well be weighing up whether its is economic to repair or replace a system which may give you limited value before you leave the premises.

There are a large number of 25 and 15 year full repairing leases terminating around now created from the property cycles of the late 1980′s and 1990′s.  Any original AC equipment surviving is likely to be at the end of its economic life, but tenants will be reluctant to replace this equipment with just a few months left in which to enjoy it.

The Ozone Regulations (2037/2000) mean that from the end of 2014 you will not be able to top up with R22 refrigerant.  It is possible therefore to repair old R22 systems up to this time, stocks of recycled refrigerant permitting, and if your lease is about to end it may well be worth doing so to hand back operational equipment to your Landlord.

Clearly for individual split DX systems the costs may not be too much of a problem.  If your plant room is substantial, the costs for keeping an ageing system operational will be significant, and at some point you may ask if it is economical to repair the system.  If your R22 AC plant has already crossed the “beyond economic repair” line, and your lease is due to expire shortly, some Tenants may be considering handing back their premises without trying to repair the AC systems at all.

If a Landlord’s building is handed back with the AC plant in disrepair, it is likely he will pursue the Tenant for a claim for damages to put the equipment back into repair.  This may mean replacing a significant part or the whole of the system, possibly with a modern system running on one of the new HFC gasses.

It becomes interesting however when the Landlord’s intentions are considered, especially if the market is telling the Landlord that his building must be equipped with the latest AC system to secure a new Tenant.  In such situations the ex-Tenant can argue that there is no diminution in the value of the Landlord’s property as a result of the Tenant’s failure to leave the AC in repair, quite simply because the Landlord would have had to replace the AC anyway.  This is known as ‘supersession.’

So, our advice to Tenants facing lease termination with old R22 equipment is:

  1. Firstly check to see if the equipment is subject to removal/reinstatement at the end of the term.  If it is, remove it before the termination date.
  2. If it is Landlord’s equipment and it can be repaired and yielded up to the Landlord in working order, then do it whilst you still can.
  3. If you have full maintenance records on the plant then make these available to show the Landlord the equipment has been lovingly maintained.
  4. If the AC system has to be handed over inoperable, be prepared for your Landlord to try to replace it with a new system rather than repair the old.
  5. Consider why the system is being replaced – is it due to its condition and cost of works, or is it due to market demands?