HVAC System. The lease will usually provide that the heating, ventilation, and air-conditioning (“HVAC”) system stays with the premises and is the property of Landlord, which means it is not available to the Tenant to grant as Collateral. However, in many cases, the Tenant buys the HVAC equipment and owns it until the end of the lease term, with leases varying in their specificity about what happens to the HVAC system at that time. In that situation, the status of the HVAC equipment is not as clear and there is a good chance of a dispute between the Landlord and the Tenant Lender. It is better to exclude the HVAC system from the description of the Collateral in which Landlord is subordinating its lien. A Landlord might also want to review the Tenant’s Pledge and Security Agreement and UCC-1 to make sure that the HVAC system is specifically excluded from the Tenant Lender’s description of its Collateral.
Appears in 3 contracts
Sources: Landlord Subordination Agreement, Landlord Subordination Agreement, Landlord Subordination Agreement