Recent legislation regarding Ozone Depleting Substances (ODS) is likely to impact landlords and tenants in unexpected ways in relation to air conditioning (AC) system maintenance and repairs. From 1st January 2015 many existing coolants and refrigerants will be banned, including all "HCFCs". Don't be fooled by this distance date - it would be wise to plan ahead now regarding your AC system to avoid the potential of disputes in the future.

The Impact

The ODS Regulations have in fact made it illegal to use 'virgin HCFCs' to maintain AC equipment since 1st Jan 2010. At present, recycled and reclaimed HCFCs, can still be used. However, the complete ban on all HCFCs, including recycled materials, comes into force from 1st Jan 2015.

It will then be illegal to use these coolants to top up leaking chillers or to reintroduce recycled refrigerants to enable equipment repairs. This means when systems need maintaining or repairing after this date, many will be at risk of being condemned due to the type of coolant used, and will require alternative refrigerants or the purchase of new equipment. The safe removal and disposal of the banned coolants will also become a factor. This will have a consequential effect on service charge calculations, repairing obligations and dilapidations claims.

What to consider?

Landlords and tenants should check their leases to determine who has responsibility for maintenance and repairs of the AC systems. Where the landlord is responsible, he should consider undertaking repair works well in advance of lease expiry to avoid resistance from tenants to hefty service charge bills at the last minute. Tenants who are consulted will be more willing to contribute to the cost. Be aware that tenants may exercise break clauses or decline renewals prior to the January 2015 deadline. This could leave a freeholder with a large bill and no method of recovery from an exiting tenant.

Tenants should check their potential liability and the type of coolants used. Tenants with a full repairing lease will have to comply with the ODS Regulations when repairing AC systems post January 2015; in other cases be prepared for increased service charges. Termination dates of leases could be crucial as an expiry date in early 2014 would be less onerous on a tenant than one expiring in late 2014 or after the full ban takes effect.

Find out what your lease agreement means and plan how to maintain/repair your AC system early to avoid possible disputes and the consequences of non-compliance. There are some government tax incentives to assist with the phase out - look out for Enhanced Capital Allowance schemes that help claim back sums expended on new equipment.