Who Fixes the Aircon? Untangling Air Conditioning Responsibility in Commercial Leases

Few topics generate as many quiet disputes between commercial landlords and tenants as air conditioning. It is installed by one party, used exclusively by the other, serves the whole premises yet is rarely part of the structure — and when it fails in August, the question of who pays is rarely answered by instinct. For landlords and letting agents, clarity on this point is not merely administrative; it directly affects tenant retention, service charge relationships and, ultimately, rental value.

How FRI Leases Typically Handle Cooling

Under a full repairing and insuring (FRI) lease, the tenant generally assumes responsibility for the repair and maintenance of the demised premises, including fixtures that serve only their unit. Where air conditioning was installed as part of the tenant's fit-out, it will almost always fall within the tenant's repairing obligation — including the cost of servicing, refrigerant checks and eventual replacement.

Complications arise in three common scenarios:

1. Landlord-installed systems serving multiple units, such as centralised VRF installations in multi-let office buildings. Here, costs are usually recovered through the service charge, which makes the lease's service charge provisions — and compliance with the RICS Service Charge Code — central to the relationship.
2. Systems inherited from a previous tenant. Whether these fall within the current tenant's obligation depends heavily on how the schedule of condition and repairing covenant are drafted.
3. Base-build systems upgraded by the landlord mid-term, which may trigger negotiations over rent review, capital contributions or lease variations.

A Landlord's Checklist Before Granting the Lease

Before heads of terms are agreed, landlords and agents should work through the following:

• Identify the system in the lease plans. Attach a schedule specifying the air conditioning equipment, its location and whether it is demised to the tenant or retained by the landlord.
• State the maintenance obligation expressly. Do not rely on the general words "fixtures and fittings". Specify servicing frequency, statutory requirements (including F-Gas refrigerant leak checks for systems above the threshold charge) and who must produce the paperwork.
• Allocate energy costs deliberately. Metered separately or recharged through a service charge, the treatment of cooling energy should be transparent — particularly as tenants scrutinise EPC ratings and net-zero commitments.
• Address end-of-life replacement. A system nearing the end of its serviceable life is a negotiating point. Clarify whether replacement is a tenant's improvement, a landlord's capital matter, or a shared cost.
• Cover access for contractors. Where a landlord's contractor must cross demised premises to service shared plant, the lease should grant the necessary rights.

The Disputes That Recur

Certain arguments appear again and again. Tenants claim a system that was poorly maintained before their tenure is not theirs to repair. Landlords find that a tenant's neglect has left plant beyond economic repair and that the lease's yield-up provisions are inadequate. Service charge disputes flare when cooling costs for shared systems are apportioned on floor area rather than usage.

Most of these can be prevented at the drafting stage. A minority end up with surveyors, and none of them end cheaply.

Maintenance as a Retention Tool

There is a commercial upside to getting this right. Prospective tenants increasingly treat reliable climate control as a baseline expectation rather than a perk — a shift accelerated by warmer summers and hybrid working patterns that concentrate occupancy into fewer, better-conditioned days. A building with documented, professionally maintained air conditioning shows better at inspection, supports a stronger EPC rating and gives agents a genuine talking point at rent review.

Some landlords go further, offering inclusive maintenance packages for landlord-owned systems as part of the incentive package. It is a defensible strategy: it preserves control over plant specification and energy performance, keeps the equipment in good order for the next letting, and removes one more thing for the tenant to dispute.

Keep It Cool, Keep It Clear

Air conditioning will continue to migrate from optional extra to expected standard across the UK's commercial stock. The leases that age well will be the ones that say, in plain terms, who installed it, who maintains it, who pays for it — and who gets the engineer's report. Landlords who settle those questions before the signature will spend far less time answering them afterwards.