TM44 for Lease Assignments and Tenant Fit-Outs: What Landlords, Tenants and Agents Must Check

Commercial lease transactions often move quickly. A tenant wants to take over a unit. A landlord wants the lease completed. The agent wants the deal across the line. The fit-out contractor is waiting to start. Solicitors are chasing documents.

In the middle of that process, one compliance item is often missed until very late:

Does the property have a valid TM44 air-conditioning inspection report?

For many commercial properties in the UK, this is not a minor admin point. If the building has air-conditioning systems with a combined effective cooling output over 12kW, a TM44 air-conditioning inspection may be legally required. This can apply to offices, retail units, restaurants, clinics, gyms, schools, hotels, warehouses, industrial units and multi-let commercial buildings.

The problem is that lease assignments and tenant fit-outs often change who controls the air-conditioning system. They can also add new cooling equipment, increase the total system capacity, or expose missing compliance records that nobody checked before the lease was signed.

For landlords, tenants, agents and managing agents, this creates a practical risk: who is responsible, who pays, and what happens if there is no valid TM44 report?

This guide explains what to check before a lease assignment, commercial handover or tenant fit-out, why TM44 matters, and how TM44.uk can help you confirm the requirement and arrange inspection.

What Is a TM44 Inspection?

A TM44 inspection is an air-conditioning energy assessment for qualifying non-domestic buildings. It applies where air-conditioning systems have a combined effective rated cooling output of more than 12kW.

The key point is that the 12kW threshold is cumulative. A building does not need one large 12kW unit. Several smaller systems can count together.

For example:

• 3 x 5kW split AC systems = 15kW total

• 4 x 3.5kW wall-mounted units = 14kW total

• 2 x 7kW cassette systems = 14kW total

• A VRF/VRV system serving multiple rooms may easily exceed 12kW

• A commercial unit with landlord AC plus tenant-installed AC may exceed the threshold once combined

A valid TM44 inspection must be carried out by an accredited energy assessor and the report is normally valid for up to five years, unless major system changes mean the compliance position needs to be reviewed.

If you are unsure whether your building qualifies, start with our guide to TM44 inspection requirements in the UK.

Why TM44 Matters During Lease Assignments

A lease assignment is when an existing tenant transfers its lease to a new tenant. In theory, this sounds simple: the incoming tenant takes over the lease and continues occupation. In practice, it can be messy because the incoming tenant may inherit responsibilities connected to the premises.

Air conditioning is a common blind spot.

The outgoing tenant may have installed AC during their occupation. The landlord may have allowed alterations years ago. The managing agent may not hold an updated asset list. The incoming tenant may assume the AC belongs to the landlord. The landlord may assume the tenant accepted responsibility under the lease.

This is where disputes start.

Before assignment, the incoming tenant should ask:

• Is there air conditioning at the property?

• Who owns the AC equipment?

• Who controls and operates the system?

• What is the total cooling capacity?

• Is there a valid TM44 report?

• When does it expire?

• Does the report cover all systems on site?

• Were any extra units installed by the current tenant?

• Are maintenance records available?

• Will the incoming tenant become responsible after completion?

If these questions are not asked before assignment, the new tenant may discover after completion that the property is missing a TM44 report. At that stage, the landlord may refuse to pay, the outgoing tenant may no longer be involved, and the incoming tenant may need to resolve the issue quickly.

This is why TM44 should be treated as part of commercial property due diligence, not something to check after occupation.

Why Tenant Fit-Outs Create TM44 Risk

Tenant fit-outs are one of the biggest triggers for TM44 confusion.

A tenant may take a commercial unit and install new comfort cooling as part of the fit-out. The work may be perfectly normal from a design and installation point of view, but the compliance record may not be updated.

This is common in:

• office fit-outs

• private medical clinics

• dental practices

• beauty clinics

• restaurants and cafes

• gyms and studios

• retail shops

• estate agency offices

• serviced offices

• education and training spaces

• commercial units converted from shell condition

A fit-out can create a TM44 requirement in two ways.

First, the new AC system may take the building above the 12kW threshold for the first time.

Second, it may change an existing system so much that the old compliance evidence is no longer reliable.

For example, a small retail unit may have two existing AC units with a combined output of 9kW. The incoming tenant adds two more units during fit-out, taking the total to 18kW. The tenant may think they have only installed “small AC units”, but the combined system may now require TM44 inspection.

This is why fit-out teams, landlords and tenants should check TM44 before installing or expanding air conditioning. It is much easier to gather asset details during installation than to reconstruct the information months later.

For new systems, you may also want to read our guide on new air-conditioning installations and TM44 inspection.

Who Is Responsible for TM44: Landlord, Tenant or Managing Agent?

There is no single answer that applies to every commercial property. Responsibility depends on the lease, the system, and who controls the operation of the air conditioning.

A useful starting point is this:

The person or organisation that controls the air-conditioning system is usually the party that must ensure the TM44 inspection is arranged.

However, commercial property is rarely that simple.

Landlord-Controlled Systems

In a multi-let office building, the landlord or managing agent may control central cooling systems serving common parts or multiple tenants. In this situation, the landlord or managing agent will often hold the TM44 report and recover costs through the service charge, depending on the lease.

Tenant-Controlled Systems

In a single-let shop, clinic or office where the tenant controls the AC system, the tenant may be responsible for arranging inspection and keeping compliance records.

Tenant-Installed Systems

Where a tenant installs its own split systems or supplementary cooling, the tenant may be responsible for those units. But if the landlord owns the building and the system remains after the tenant leaves, responsibility can become unclear unless the lease and licence for alterations deal with it properly.

Mixed Responsibility Buildings

Some buildings have landlord plant plus tenant-installed systems. For example, an office building may have landlord-controlled base cooling, while one tenant adds extra cooling for a server room or meeting rooms. In that case, both parties may need to understand which systems are included in the TM44 report.

If responsibility is unclear, do not guess. Check the lease, maintenance contract, service charge structure and asset list.

For more detail, see our guide on TM44 legal responsibility between landlord, tenant and managing agent.

What Landlords Should Check Before Approving a Lease Assignment

Before approving a lease assignment, landlords should check whether the AC compliance file is complete.

A practical landlord checklist should include:

• current TM44 report, if applicable

• AC asset list

• maintenance records

• F-Gas records, where relevant

• evidence of who installed the system

• licence for alterations, if the tenant installed AC

• whether all AC units are included in the report

• expiry date of the TM44 report

• whether the incoming tenant will control the system

• whether any new fit-out works will add cooling capacity

This protects the landlord because it reduces the risk of future disputes. It also helps maintain the value and compliance status of the property.

A missing TM44 report may not stop every lease transaction, but it can weaken the landlord’s compliance position and create unnecessary questions during due diligence.

What Tenants Should Check Before Signing or Taking Assignment

Incoming tenants should treat AC compliance as part of their property checks.

A commercial tenant may be very focused on the rent, deposit, lease term, repairs, business rates and fit-out cost. Those are important, but the AC system can also become a real cost if ignored.

Before signing, the tenant should ask:

• Is the AC system working?

• Is it included in the lease?

• Is it landlord equipment or tenant equipment?

• Is there a current TM44 report?

• What is the cooling capacity?

• Who pays for maintenance?

• Who pays for TM44 renewal?

• Are any recommendations outstanding?

• Is the system suitable for the proposed use?

• Will the tenant’s fit-out increase cooling capacity?

This matters especially for tenants taking a property for medical, retail, hospitality, office or leisure use. These businesses often rely heavily on cooling, and several small units can easily exceed the TM44 threshold.

If you are taking over a unit and are not sure what applies, TM44.uk can review the basic information and advise whether a formal inspection is likely to be required.

What Commercial Agents Should Know

Commercial agents are not expected to be energy assessors, but they can prevent problems by asking the right questions early.

If a unit has visible AC, agents should ideally ask the landlord or existing tenant whether a TM44 report exists. This is especially important where the property is marketed as air-conditioned.

Useful questions include:

• Is there a valid TM44 certificate or report?

• Is the system over 12kW?

• Who maintains the system?

• Are the AC units landlord-owned or tenant-installed?

• Is the incoming tenant planning a fit-out?

• Will the AC remain in place after assignment?

This helps avoid late-stage surprises. It also gives agents a stronger position when dealing with professional tenants, solicitors, landlords and facilities managers.

For wider property compliance, see our guide on commercial property compliance checks.

What Solicitors Should Request During Due Diligence

Commercial property solicitors often request EPCs, asbestos information, fire safety documentation, planning documents, licences for alterations and service charge information. TM44 should be considered where air conditioning is present.

Useful requests include:

• copy of the current TM44 report

• evidence of lodgement, if available

• AC asset schedule

• confirmation of system capacity

• maintenance and service records

• F-Gas records, where applicable

• details of tenant alterations involving AC

• confirmation of who will be responsible after completion

If no TM44 report is available, the issue should be raised before completion so the parties can decide who will arrange and pay for the inspection.

This is not only about legal compliance. It is about avoiding post-completion arguments.

Common TM44 Problems Found During Lease Assignments and Fit-Outs

From a practical point of view, the same problems appear again and again.

1. Nobody Knows the Total Cooling Capacity

The landlord knows there is AC, but not the kW rating. The tenant knows the units work, but not the model numbers. The agent has photographs but no asset list.

Without capacity information, nobody can confirm whether TM44 applies.

2. The Existing TM44 Report Is Out of Date

The report may have expired after five years. This is common where the property has been occupied for a long time and nobody diarised renewal.

For renewal guidance, see our page on TM44 renewal cost and timing.

3. Tenant-Installed Units Were Never Added to the Compliance File

A tenant may install extra AC for meeting rooms, treatment rooms, server rooms or customer areas. The landlord may approve the works, but the TM44 file is never updated.

4. The Report Does Not Match the Building

Sometimes the TM44 report exists, but the system on site has changed. Units may have been replaced, removed or added. If the asset list no longer matches the property, the compliance position should be reviewed.

5. Maintenance Records Are Mistaken for TM44

An annual service sheet is not the same as a TM44 report. Maintenance is important, but TM44 is a separate air-conditioning energy assessment.

For related differences, see our guide on TM44 vs F-Gas inspections.

6. The Tenant Assumes the Landlord Is Responsible

This is risky. The lease may place responsibility on the tenant, especially where the tenant controls the demised premises and AC system.

7. The Landlord Assumes the Tenant Is Responsible

This is also risky. If the system is landlord-controlled or serves multiple tenants, the landlord or managing agent may need to hold the report.

Example Case Study: Office Lease Assignment With Missing TM44 Evidence

A professional services company agrees to take assignment of a lease for a two-floor office in a managed building. The office has several wall-mounted and cassette AC units. The outgoing tenant confirms the AC is working and serviced.

During due diligence, the incoming tenant asks for compliance documents. The landlord provides the EPC and fire alarm records, but no TM44 report. The managing agent says the AC inside the office is tenant-controlled and not part of the landlord system. The outgoing tenant says they inherited the units from the previous occupier and never arranged a TM44 inspection.

The incoming tenant is now in a difficult position. The lease assignment is close to completion, but nobody can confirm:

• the total cooling capacity

• whether the system exceeds 12kW

• whether a valid TM44 report exists

• who should pay for inspection

• whether the incoming tenant will become responsible after completion

The practical solution is to arrange a TM44 review before completion. The assessor checks the AC asset information, confirms the system is above 12kW, carries out the inspection and produces a report. The parties then agree how the cost is handled before the assignment completes.

This avoids the incoming tenant discovering the issue after completion, when they would have less leverage.

Example Case Study: Retail Fit-Out That Triggered TM44

A retail tenant takes a small high street unit. The property already has two older AC units. As part of the fit-out, the tenant adds three new wall-mounted systems to serve the shop floor and stock area.

Each individual system appears small, but together the combined cooling output exceeds 12kW. The fit-out contractor focuses on installation, not TM44 compliance. The landlord approves the works but does not request updated energy compliance evidence.

Two years later, the tenant prepares to assign the lease. The incoming tenant’s solicitor asks for AC compliance documents. There is no TM44 report. The tenant now has to arrange inspection urgently, while also dealing with the lease assignment, stock transfer, landlord consent and legal paperwork.

This could have been avoided if the TM44 requirement had been checked at fit-out stage.

Does a TM44 Report Mean the AC System Has Passed or Failed?

TM44 is not usually a simple pass or fail inspection in the same way some people think about safety certificates. It is an energy assessment. The report reviews system efficiency, sizing, controls, condition, maintenance and opportunities for improvement.

A report may identify recommendations such as:

• improving controls

• reviewing time schedules

• cleaning filters or coils

• improving maintenance records

• replacing inefficient equipment

• checking whether the system is oversized

• improving zoning

• reducing unnecessary cooling operation

The recommendations are important because they can help reduce energy waste and improve the building’s operational performance.

For more detail, see our guide on TM44 report recommendations explained.

Why This Is Becoming More Important

TM44 compliance has historically been missed by many UK businesses. Awareness has been lower than it should be, especially among smaller commercial occupiers. However, that is changing.

Commercial property compliance is becoming more visible. Landlords, tenants, investors and managing agents are paying more attention to energy performance, ESG, operating costs and regulatory evidence.

A missing TM44 report can now become an issue during:

• lease assignment

• lease renewal

• property sale

• acquisition due diligence

• landlord compliance reviews

• managing agent audits

• service charge disputes

• fit-out approval

• refinancing

• insurance reviews

• corporate ESG checks

In simple terms, TM44 is no longer something to leave in the drawer until someone asks. It should be part of the commercial property compliance file.

For wider context, see our article on TM44 commercial property deal risk.

What Documents Should Be Kept in the Compliance File?

For a clean lease handover or fit-out record, the compliance file should ideally include:

• current TM44 report

• report lodgement reference, if available

• AC asset list

• model numbers and locations

• installation records

• commissioning details for new systems

• maintenance records

• F-Gas records, where applicable

• landlord consent or licence for alterations

• details of tenant-installed systems

• responsible party confirmation

• next renewal date

This helps the next transaction run more smoothly. It also gives the landlord, tenant and managing agent a clear record of what exists in the building.

For more detail, see our guide on TM44 compliance file documents businesses should keep.

When Should You Book a TM44 Inspection?

You should consider arranging a TM44 inspection or review:

• before assigning a commercial lease

• before taking over an air-conditioned unit

• before approving a tenant fit-out

• after installing new AC systems

• before selling a commercial property

• before lease renewal

• when a managing agent cannot find a report

• when the previous report has expired

• when the asset list does not match the building

• when there is uncertainty over landlord or tenant responsibility

If there is a legal deadline, transaction deadline or fit-out date, it is better to act early. TM44 inspections can usually be arranged efficiently, but access, roof areas, plant rooms, tenant availability and asset information can all affect timing.

For urgent cases, see our emergency TM44 24-48 hour service.

How TM44.uk Can Help

TM44.uk provides TM44 air-conditioning inspection support across the UK for landlords, tenants, agents, managing agents, facilities managers and commercial property professionals.

We can help with:

• checking whether TM44 is likely to apply

• reviewing AC asset information

• arranging accredited TM44 inspections

• inspecting offices, shops, schools, clinics, hotels, gyms, restaurants, warehouses and commercial units

• supporting lease assignments and handovers

• helping with tenant fit-out compliance questions

• providing reports for compliance files

• supporting multi-site property portfolios

• helping managing agents track renewals

If you have a lease assignment, tenant fit-out, property handover or urgent compliance question, send us the property details and any AC information you already have.