How do you keep your tenants compliant with HVAC lease obligations?
If tenants send you service contracts as proof of service, you’ve made a common (and potentially expensive) mistake.
Requiring a tenant to enter into a service agreement with an HVAC vendor (and even seeing the contract) doesn’t mean that the maintenance is actually getting done.
In some cases, it isn’t until after tenants leave you see that their HVAC system in poor shape, needing repairs or full-blown replacement.
Considering that the cost to replace a tenant HVAC system can be up to $10K, your team needs a foolproof way to ensure tenant compliance and to prove when they neglected their obligations. Otherwise, you’ll be footing the bill.
Wondering how? Read on to learn our top four tips to better triple net compliance.
1. Digitize HVAC Inventory
Before tenants can do any HVAC maintenance, they need to know key information about the unit, including the make, model, and serial number. They also need to know what maintenance has already been done by you or prior tenants.
Finding this information usually means sorting through paper and digital files or chasing down your team for the records.
This process can be time-consuming and frustrating. And if the process gets too tedious, some tenants will give up on maintenance altogether.
To give tenants clear visibility into a complex system, use HVAC management software with a complete digital inventory. This software automatically stores important information about your HVAC units in one central location. Instead of hunting around for HVAC data, tenants can quickly find what they need, when they need it.
With a faster and easier process for collecting HVAC data, your tenants are more likely to do required maintenance – improving your triple net compliance.
2. Automate Maintenance Reminders and Recording
Tenants might be responsible for HVAC maintenance in triple net leases, but this doesn’t mean less work for you. You likely spend valuable time tracking down tenants, calling them with reminders and gathering service records.
Instead of wasting time on tenant compliance (and driving your tenants crazy in the process!), use HVAC management software that sends automated maintenance reminders. Once a tenant is associated with a unit, the software will send them regular reminders to conduct maintenance and record it.
If tenants don’t do maintenance (resulting in a damaged unit) you have records to show they never responded to maintenance requests. This helps you prove they’re at fault – so you can keep their security deposit to cover replacement costs.
With so much on your plate, you don’t have time to hound tenants about triple net compliance. HVAC management software with automated maintenance reminders can handle this for you – freeing you up to focus on more value-adding activities.
3. Tap into a Vendor Marketplace
Another way to improve your triple net compliance is to have access to a network of qualified HVAC vendors.
Finding a vendor to service their HVAC units can be a major compliance roadblock for tenants. They often don’t where to look or how to vet their vendors. So, they end up with a subpar vendor or else don’t do the necessary maintenance at all. This can lead to costly equipment breakdowns – which are a headache for both you and your tenants.
The easiest way to help tenants find vendors is with HVAC management software that has a trusted vendor marketplace. Tenants can easily find and compare vetted service providers and negotiate pricing. Being able to find vendors easily helps tenants stay in compliance with their triple net leases and keeps your HVAC units healthy.
4. Increase Compliance Visibility
Figuring out who’s compliant can be complicated. Even after tracking tenants down and finding service records, you still don’t always know who is – or isn’t – holding up their end of the lease.
Tracking compliance can be particularly tricky since it isn’t a one and done task. Just because a certain tenant is compliant one quarter, doesn’t mean that they’ll remain so in the next.
Since tracking compliance is an ongoing effort, you need to know in real-time who has or hasn’t provided service records to get in front of emerging problems. This also helps you to avoid prospective tenants stalling the leasing process waiting on your team to provide clear records of service.
The easiest way to clearly see tenant compliance is to find HVAC management software with a tenant compliance dashboard. With this dashboard, you can see tenant records and compliance at a glance. This helps your team to correct any compliance issues fast.
Wrapping It Up
It’s easy to assume that a vendor service contract means that your tenants are compliant. But even with these contracts, your tenants could be falling short of their lease obligations.
Especially if your tenants are facing any financial distress, contracts like these might be the first to be cancelled – and you won’t know until it’s too late.
Instead of relying on contracts, try HVAC management software to gain better insight into triple net compliance.
Wondering where to start?
Consider Prism. With Prism’s HVAC management module, you can automatically remind tenants to perform maintenance, access a vendor marketplace for repairs, see detailed tenant compliance dashboards and more.
Learn more about how Prism HVAC Management can help you ensure better tenant compliance by watching our on-demand webinar.