It’s not uncommon for property teams to lack visibility into what their tenants are doing. However, when it comes to tenant compliance, HVAC roles and responsibilities need to be clear. Because if commercial tenants fall short of HVAC obligations, it leaves property teams in a bind. And can cost you a lot of money. 

The retail and industrial sectors specifically are prone to common HVAC tenant compliance issues because of triple-net lease agreements. In part, these agreements establish HVAC maintenance guidelines for CRE properties. And if terms are not upheld, properties can risk noncompliance.  

Keep reading for proactive ways to manage HVAC compliance requirements so you can avoid paying for costly HVAC repairs or worse, replacements.  

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Take Stock of Your HVAC Capital Planning Strategy

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1. Establish Clear Expectations with Tenants 

When negotiating triple-net lease agreements, property teams and tenants should have a collective understanding of the terms, language, and HVAC maintenance expectations. 

Even the most standard triple-net lease agreements have HVAC compliance requirements for tenants. Typical requirements include establishing a contract with a licensed HVAC vendor, specifying caps on HVAC repairs, indicating maintenance tasks and frequency, etc. 

2. Guarantee Compliance with Vendor Service Tickets 

It’s common among property managers to mistake vendor contracts as proof of compliance. Tenants can easily cancel vendor contracts and might not communicate when they do so. Even if tenants’ budgets shrink or priorities change, HVAC units still need to be maintained. Know that proper maintenance can only be proven through a vendor service ticket.  

3. Compile a Full Equipment Inventory 

It’s impossible to effectively manage an HVAC unit without knowing its full story. Essential information includes make, model, expected lifespan, and previous maintenance. 

Utilizing HVAC building management software makes it easy to share these details with tenants. Overseeing tenant compliance becomes simple when your full inventory is in one location. A digital record of HVAC units facilitates better communication and understanding between property managers and tenants. 

Avoid HVAC Tenant Compliance Issues

Avoid HVAC Tenant Compliance Issues

Three ways HVAC building management software can help mitigate risk from HVAC tenant compliance challenges.

4. Incorporate an Automated Tracking System 

Avoid spending hours trying to track down HVAC reports by automating maintenance requests. Property teams can send automated maintenance report requests monthly, quarterly, or seasonally.  

Most importantly, HVAC building management software offers the tools to prove instances of noncompliance. And creates a digital trail. Because of the extensive documentation HVAC software offers, property teams can easily hold tenants accountable. 

5. Provide a List of Go-To Vendors 

When property managers build a roster of vendors for tenants, they know exactly who their tenants are working with for maintenance projects. Property teams can price out the right vendor and manage the vetting process for their tenants. Helping tenants find and evaluate suitable vendors for HVAC maintenance removes stress from all parties. 

6. Utilize Data Visualization Tools 

Whether you have a small or large CRE portfolio, it’s time to transition away from spreadsheets. HVAC management software makes it easy to track tenant compliance. With the right tech solution, property teams can see who is compliant or if they need to intervene. Dynamic charts and dashboards are engaging ways to increase compliance visibility. And they track which tenants are falling short by associating service tickets to each HVAC unit.  

Spot Common HVAC Issues Before It’s Too Late 

Not understanding HVAC compliance requirements is detrimental to both CRE tenants and property owners and operators. If tenants do not uphold their end of the agreement, property teams might experience: 

  • Tenants vacating properties 
  • Burnt out HVAC units in need of repairs or replacement 
  • Lack of data needed to prove compliance 
  • Costly bills 

Leaving an HVAC unit in disrepair can cost around $10,000 to replace. Instead, quarterly HVAC maintenance typically costs about $200. Don’t leave anything to chance and risk pouring thousands of dollars down the drain. 

Save both time and money (and future headaches) and consider HVAC building management software. Meet HVAC compliance requirements with automated maintenance requests, compliance dashboards, and a digital inventory of HVAC units. HVAC management software can help lower HVAC maintenance and operations costs and drive new leasing revenue.