After-Hours HVAC
Provisions governing heating, ventilation, and air conditioning service outside standard building operating hours, including hourly rates, minimum charges, and advance notice requirements.
Model Lease Language Variations
“HVAC service outside Building Operating Hours (8:00 AM – 6:00 PM weekdays, 8:00 AM – 1:00 PM Saturdays) shall be available upon twenty-four (24) hours advance request at Landlord's then-current hourly rate. The initial rate is $75.00 per hour per zone, with a four (4) hour minimum. Landlord may adjust the rate annually to reflect actual costs.”
High hourly rate with 4-hour minimum. Narrow standard hours (no Saturday afternoons). Landlord can increase rate annually without cap.
“HVAC during Building Operating Hours (8:00 AM – 7:00 PM weekdays, 9:00 AM – 1:00 PM Saturdays) is included in Operating Expenses. After-hours HVAC is available at Tenant's request at Landlord's cost (including electricity, equipment depreciation, and labor), currently estimated at $50.00 per hour per zone, subject to annual adjustment based on actual cost changes, with a two (2) hour minimum.”
Cost-based pricing with transparent components. Extended weekday hours. 2-hour minimum. Annual adjustment tied to actual costs, not landlord's discretion.
“HVAC during Building Operating Hours (7:00 AM – 8:00 PM weekdays, 8:00 AM – 2:00 PM Saturdays) is included in Base Rent. After-hours HVAC shall be provided at actual incremental cost (electricity only, as determined by the Building's energy management system), not to exceed $35.00 per hour per zone (increased annually by CPI). No minimum charge. Tenant may request after-hours HVAC via the Building's automated system.”
Long standard hours. Electricity-only cost (no equipment or labor allocation). Dollar cap with CPI escalation. No minimum. Automated ordering.
Calculation Methodology
1. Define standard Building Operating Hours per the lease. 2. Track after-hours HVAC requests by tenant (date, time, duration, zones). 3. Calculate cost per hour: electricity consumption × rate + equipment wear allocation + labor (if applicable). 4. Apply minimum charge if usage is below minimum. 5. Multiply hourly rate by actual hours (rounded up to minimum). 6. Bill tenant directly — after-hours HVAC is typically a direct charge, not part of the CAM pool.
Common Drafting Errors
Not defining 'Building Operating Hours' precisely — disputes arise over holiday schedules and whether Saturday hours are standard
Failing to specify the cost basis (electricity-only vs. fully-loaded) — can create a 40-60% difference in hourly rate
Not including a rate cap or adjustment methodology — hourly rates can increase without limit
Omitting provisions for shared zones — when one tenant's after-hours request benefits adjacent tenants, who pays?
Relevant Case Law
Tenant disputed $2.1M in annual after-hours HVAC charges, arguing landlord's fully-loaded rate included capital equipment depreciation. Court held the lease permitted only 'incremental costs,' limiting recovery to electricity and labor.
Billing System Implications (Yardi / MRI)
In Yardi, after-hours HVAC is typically billed through a separate charge code, not through the recovery billing module. Common error: including after-hours HVAC revenue in the operating expense pool as a credit, which reduces all tenants' CAM but only benefits the requesting tenant. In MRI, after-hours HVAC is a tenant-specific charge — verify it is excluded from the Recovery Analysis pool and billed as a direct tenant charge.
CapVeri Analysis
After-hours HVAC charges are a significant expense for tenants with non-standard operating hours (law firms, financial services). The fully-loaded vs. incremental cost distinction can represent a 50%+ difference in the hourly rate. CapVeri flags after-hours HVAC charges that exceed market benchmarks for the building class.
Related Resources
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