Identifies whether the landlord or tenant is responsible for replacing HVAC units.
By Angel Campa, Founder · Updated March 2026
HVAC replacement is one of the most expensive maintenance items in commercial real estate, costing $5,000 to $15,000 per rooftop unit. In NNN and industrial leases, tenants often bear this responsibility without realizing it. A 20,000 RSF retail space with 4 rooftop units faces potential replacement costs of $40,000-$60,000. Knowing who is responsible allows for proper reserve budgeting and maintenance scheduling.
Found in the "Maintenance and Repairs" section or in the lease structure/NNN provisions. In industrial leases, HVAC responsibility is often part of a broader "Tenant Maintenance" paragraph. The work letter may also address initial HVAC installation.
Lextract uses a combination of AWS Textract OCR and Claude AI to identify and extract the hvac responsibility from your lease PDF. The AI searches for all pages of the document, then assigns a confidence score based on OCR quality and extraction certainty. Fields with lower confidence are flagged for human review.
TI Allowance
The total monetary subsidy provided by the landlord for space customization.
TIA per RSF
The improvement allowance calculated on a per-square-foot basis.
Landlord's Work
The specific construction obligations the landlord must complete prior to possession.
Tenant's Work
The scope of construction the tenant is responsible for managing and funding.
Restoration Obligation
The duty of the tenant to remove improvements and restore the space upon exit.
In gross and modified gross leases, the landlord typically handles HVAC replacement as a building standard service. In NNN leases, the tenant often bears full HVAC responsibility including replacement. In standard NNN (not absolute net) leases, the landlord may retain roof and structural responsibilities including HVAC.
Yes. If the tenant is responsible for HVAC, the lease should require regular preventive maintenance (typically quarterly service contracts). This protects both parties: the tenant avoids premature failure, and the landlord ensures the equipment is properly maintained during the lease term.
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