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12/19/2025

Repairs vs. Replacement: Roof & HVAC Clauses That Can Destroy Your Budget

Repairs vs. Replacement: Roof & HVAC Clauses That Can Destroy Your Budget

One of the fastest ways a “good deal” becomes a financial disaster is a lease that quietly shifts major replacements to the tenant.

Landlords often write maintenance obligations in a way that sounds reasonable—until you realize it includes paying for a new roof, new HVAC units, or a parking lot resurfacing.

This guide explains the difference between repairs and replacements, what to look for in your lease, and negotiation approaches tenants use to limit exposure. (Not legal advice.)

Why this clause matters more than base rent

A replacement bill can dwarf years of rent savings.

Even if a landlord offers a lower base rent, the economics collapse if you’re responsible for replacing:

  • Roof membranes or major structural roof components
  • HVAC units or major building systems
  • Parking lot resurfacing or drainage remediation

If you’re comparing locations, make sure you compare risk exposure, not just rent. Tools like:

  • /tools/scenario-simulator

can help you model total cost, but only if the lease responsibilities are defined clearly.

The language trap: “maintain, repair, and replace”

Many leases include a phrase like:

Tenant shall maintain, repair, and replace the Premises and all systems…

That single sentence can be interpreted as:

  • routine filters and service calls and
  • full unit replacement when it fails

Tenants should push to separate:

  • Routine maintenance (filters, belts, service calls)
  • Repairs (fixing something broken)
  • Capital replacement (new unit, new roof, resurfacing)

Roof clauses: what tenants should look for

Roof risk depends on the building type:

  • In multi-tenant retail/office, the roof is usually a landlord responsibility
  • In single-tenant NNN, landlords often try to shift more roof risk

Red flags:

  • Tenant responsible for “roof replacement” or “structural repairs”
  • Tenant responsible for “all building systems” without exceptions
  • No requirement that the roof be delivered in good condition

Tenant-friendly approaches:

  • Landlord maintains and replaces roof (tenant pays only for damage caused by tenant)
  • If costs are passed through: amortize and limit to specific categories
  • Require a “roof condition” representation at delivery (or inspection right)

HVAC clauses: the #1 surprise bill

HVAC is commonly shifted to tenants because it feels “unit-specific,” especially in retail.

What’s reasonable varies by building, but common tenant protections include:

  • Landlord replaces HVAC after a certain age or at end-of-life
  • Tenant handles routine maintenance and minor repairs
  • Replacement costs are capped or amortized

Red flags:

  • Tenant pays replacement regardless of age/condition
  • “Maintain in first-class condition” without a standard
  • Tenant responsible for equipment serving multiple tenants

Practical negotiation language (conceptually):

  • “Tenant maintains; landlord replaces capital equipment unless damage caused by tenant.”

Parking lots and exterior: easy to miss, expensive to fix

Parking and exterior maintenance can include:

  • Striping
  • Potholes and patching
  • Lighting and signage
  • Drainage and resurfacing

Red flags:

  • Tenant responsible for “parking areas” in a multi-tenant property
  • No distinction between patching and resurfacing

Tenant-friendly approach:

  • Tenant pays for damage caused by tenant; landlord maintains common areas
  • If there’s a pass-through, it belongs in CAM with exclusions and audit rights

Three negotiation strategies that actually work

1) Cap your exposure

If the landlord won’t keep replacement, negotiate a cap:

  • “Tenant replacement responsibility capped at $X per year.”

2) Amortize capital items

If a replacement is passed through, require amortization over useful life.

3) Condition at delivery

If you’re taking on maintenance obligations, require the landlord to deliver:

  • HVAC in good working order
  • Roof watertight and in good condition

How BizLeaseCheck helps

BizLeaseCheck flags clauses that:

  • shift roof/HVAC replacement to tenant
  • use broad “repair/replace” language
  • lack caps, amortization, or delivery condition protections

If you want a fast baseline, upload your lease here:

  • /analyze

Not legal advice

This article is for informational purposes only and is not legal advice. Commercial leases and market norms vary by property type, location, and deal size. Use this as a checklist and confirm key terms with qualified professionals.