Landlord or Tenant: Who Is the "Owner or Operator" When the Refrigeration Comes With the Lease?

The restaurant's walk-in cooler was there when the tenant signed. Its condensing unit bolts to a roof the tenant has never seen. The lease says the landlord handles "structural and mechanical systems," or it says the tenant takes the space "as-is" and maintains everything — depends which lease, which lawyer, which decade.

Then a technician adds nine pounds of R-448A to the walk-in, runs the math, and the leak rate comes back over the 20% threshold. A federal 30-day repair clock is now running under 40 CFR Part 84, Subpart C. Somebody is the "owner or operator" of that appliance in the eyes of the EPA, and that somebody carries the repair duty, the leak-rate calculations, the three-year records file, and the penalty exposure if any of it slips.

Landlord and tenant will each read the lease and conclude, sincerely, that it's the other one. Here's what the rule actually says — and why the lease is answering a different question than the one the EPA asks.

The Definition Both Sides Should Read Before the Lease

Subpart C doesn't use the words "landlord" or "tenant" anywhere. It hangs the duties that matter here — the leak-rate math, the repairs, the records, the report — on one defined term, and the definition is one sentence long:

Read the four verbs. Owns — that can be the landlord whose building came with the refrigeration. Leases — that is, verbatim, the tenant. Operates — the party running the equipment day to day, setting the thermostat, loading the walk-in, calling for service. Controls — whoever decides when the technician comes and what gets fixed.

Notice what the definition is not doing: it is not picking one party. It's a net, not an arrow. A triple-net tenant who runs and services the walk-in is squarely an operator. A landlord who owns the equipment and holds the HVAC service contract is squarely an owner. A property-management company that controls the mechanical contracts for a strip mall is an operator too — the definition catches whoever's hands are actually on the levers, and it can catch more than one set of hands at the same time.

Whether it can also catch the outside servicing contractor is less settled than it looks. The rule calls whoever does the hands-on servicing a technician (§ 84.102), and § 84.106 writes the duties below to the owner or operator — but the definition's second clause also reaches anyone who "controls or supervises any practice, process, or activity" the subpart regulates, and whether that can include an outside contractor is a question we treat as open. We've mapped the contractor's side of the invoice in detail.

What the Owner or Operator Actually Carries

Whoever lands inside that definition carries the whole Subpart C leak-repair program for every covered appliance — anything holding 15 pounds or more of a refrigerant that contains an HFC (or a substitute with a GWP above 53), except an appliance running solely on an ozone-depleting refrigerant such as R-22, and residential and light commercial air conditioning and heat pumps, rooftop units and split systems included (§ 84.106(a); 89 FR 82718–82719). The load-bearing duties, each written in § 84.106 explicitly to "the owner or operator":

• The leak-rate calculation, § 84.106(b). "The owner or operator must calculate the leak rate every time refrigerant is added to an appliance…" Every addition, every time, unless it is made immediately following a retrofit or the installation of a new appliance, or qualifies as a seasonal variance. The technician who adds the gas must hand over documentation of the service — but the calculation duty sits with the owner or operator.
• The repair clock, § 84.106(c)–(e). Owners or operators must repair leaks when the leak rate exceeds the applicable threshold, unless they retrofit or retire the appliance instead — 30 days from the exceedance (120 if an industrial process shutdown is required), with an initial verification test inside that window and a follow-up test behind it.
• The records, § 84.106(l). Three years, minimum, per appliance: the appliance file, every service event, leak inspections, verification tests. What a compliant file contains, field by field, is its own discipline.
• The chronic-leaker report, § 84.106(j) and (m)(4). Appliances "that leak 125 percent or more of the full charge in a calendar year" trigger a report to the EPA, due March 1 of the following year.

None of those sentences contains a carve-out for "unless the lease says otherwise." A lease is a contract between two private parties. The EPA is not a party to it.

The lease decides who pays for the compressor. It does not decide who the federal government holds responsible for the leak-rate math. Those are two different questions, and only one of them is negotiable.

What the Enforcement Record Actually Shows

If the definition feels abstract, the settlement history isn't. EPA's leak-repair settlements with the retail chains below have named the businesses running the stores:

Grocery chains lease an enormous share of their locations. The consent decrees still named the chains; Kroger's complaint, for one, alleges that Kroger owned and operated the appliances at issue. And the pattern hasn't aged out: in April 2026, a proposed consent decree landed on Kroger — a $2.5 million penalty and an estimated $100 million over three years to reduce leaks and improve compliance. Those cases were brought under the older Section 608 rules at a 50-pound threshold; the same architecture now starts at 15 pounds, which is what pulls the single-location tenant and the small landlord into the same conversation.

The ceilings behind any of it are the Clean Air Act's: $59,114 per day, per violation when EPA assesses the penalty itself (the total it can seek that way is limited to $472,901 unless EPA and the Attorney General jointly approve more), and $124,426 per day, per violation in a federal court case (40 CFR § 19.4). Nobody pays the ceiling for one walk-in. But "per day" is what makes an unassigned duty expensive: a repair clock nobody owned that blew 60 days ago is 60 days of exposure, and it accrued while landlord and tenant were each assuming the other had it.

The Four Lease Situations, Mapped Honestly

No blog post can read your lease, and this one isn't going to try. What the definition supports is a straightforward mapping of who starts inside the "owner or operator" net in the four arrangements that cover most small commercial space:

1. Triple-net (NNN): tenant maintains everything

The tenant operates the equipment, holds the service contracts, and controls repairs. The tenant is an operator — the clearest case in the whole matrix. The landlord still owns the appliance, so they're not automatically outside the net.

2. Gross / full-service lease: landlord maintains HVAC

The landlord (or their management company) holds the service contract and decides what gets fixed — that's ownership and control. The landlord is carrying the program. But a tenant who runs the equipment daily hasn't necessarily exited the definition either — "operates" is one of the four verbs, and it's the tenant's walk-in full of the tenant's inventory.

3. Property manager in the middle

A management company that controls the mechanical contracts "controls … equipment" in the plain words of § 84.102. Managers are routinely inside the net, whatever the ownership structure above them. If you manage a portfolio of strip malls, every covered appliance in every unit where you hold the service relationship is a program you're arguably running.

4. Tenant's own installed equipment

The tenant bought it, installed it, runs it, and will take it (or abandon it) at surrender. Tenant, full stop — ownership, operation, and control all point the same way.

The honest summary across all four: the ambiguity is real, the EPA doesn't have to resolve it in your favor, and it can name more than one party. The way out isn't a clever reading of the definition — it's making sure that, whichever side of the lease you're on, somebody is verifiably running the program and holding the records.

Six Questions to Settle With the Lease in Hand

Not legal advice — a checklist of the questions your lease and your counsel should be able to answer, because each one maps to a specific § 84.106 duty that otherwise defaults to "whoever the EPA decides was in control":

1. Who holds the refrigeration/HVAC service contracts for the covered appliances in the space? (That party controls the equipment — verb four.)
2. Who receives the technician's service records? The § 84.106(l)(4) handoff runs from the servicing contractor to the owner or operator — if those records are landing in a property manager's inbox while the tenant keeps the compliance file (or vice versa), the file is incomplete by design.
3. Who calculates the leak rate on every addition, and with what full-charge number? The § 84.106(b) duty is explicit, and the math needs the appliance's full charge — a number the party who didn't install the equipment often doesn't have.
4. Who keeps the three-year records file, and would it survive the appliance changing hands at lease surrender?
5. Who watches the 125% chronic-leaker total across the calendar year, and who would file the report?
6. What happens at move-out — does the equipment convey, and does the records file convey with it?

If the answer to any of these is "I assumed the other party," that's the gap. Write the answer down, on whichever side of the lease you sit.

What to Do This Week

If you're the tenant: list every refrigerant appliance in your space that plausibly holds 15 pounds or more — the walk-in, the reach-in rack, but not the rooftop AC unit, which EPA places in the exempt residential and light commercial air-conditioning subsector (89 FR 82718–82719). For each one, establish whether you hold the service relationship. If you do, you're an operator: start the per-appliance file now, even if it's a free spreadsheet or a printed log sheet clipped inside the equipment door.

If you're the landlord or property manager: the units where you hold the mechanical contracts are your program. The conversation to have with your service contractor is about exactly what lands in your file after every visit — because the (l)(4) minimum handoff doesn't include the full charge or the calculated leak rate, and your file needs both.

Whichever side you're on: the worst position in this whole article is the appliance where both parties can honestly say they thought the other one had it. The definition in § 84.102 was written so that the EPA never has to care about that confusion. You do.

The lease allocates the work and the invoice. § 84.102 allocates the duty — to whoever owns, leases, operates, or controls the appliance, which may be you, the other party, or both. The one resolution the rule respects is a record that shows the program actually being run.