Lifts and the year 2000

Citation

(1999), "Lifts and the year 2000", Property Management, Vol. 17 No. 1. https://doi.org/10.1108/pm.1999.11317aab.028

Lifts and the year 2000

Lifts and the year 2000

Keywords Building maintenance, Landlord and tenant

Landlords and tenants may face costly legal disputes if they fail to address year 2000 problems, warns national law firm Eversheds.

David Slade, property lawyer for national law firm Eversheds, said: "The impact of the millennium bug on computers is now widely appreciated. However, lifts, security systems, air-conditioning and electronic doors are often controlled by computer chips which contain date-sensitive software and may not be millennium-compliant. The dangers of such equipment failing are huge. For example, if the software embedded in the lifts fails to recognise year 2000 data, staff or members of the public could find themselves trapped. It is vital that landlords and tenants address these issues now.

"The software incorporated into equipment such as lifts is usually contained as an embedded chip which governs the operation of the equipment by using date-related instructions. It is possible that the chip in lifts may fail to recognise appropriate information such as when the last service took place or is due. The in-built response to this lack of information may be to shut itself down automatically.

"Currently, there is much debate as to who is responsible for repairs or replacing such equipment. Where possible, the landlord and tenant should look to the supplier to repair or replace equipment, yet suppliers are reluctant to provide year 2000 compliance and often specifically exclude liability in this area. Furthermore, insurers are also restricting their liability".

The question of responsibility therefore usually depends on the terms of the lease. Where the tenant occupies the whole premises under a full repairing obligation, the landlord will want to make it the tenant's responsibility to ensure that any millennium compliance costs are covered by the tenant's obligation torepair. The tenant may argue that repairs of this nature amount to improvements, so, where possible, a landlord should ensure that a tenant's repairing covenant encompasses inherent defects and improvements.

Most leases also require the tenant to comply with statutes giving the tenant obligations under health and safety legislation. These include obligations to maintain systems and equipment and therefore throw a further compliance burden on the tenant.

Slade continues: "Where the tenant occupies part of a building with other tenants and shares equipment and facilities such as the lifts, the landlord may seek to pass on any millennium associated costs to the tenant by way of service charge. If this were to be accepted under the terms of the lease, for example, by a catch-all provision, the landlord would probably have to bear the cost initially and then seek to recharge to the tenants. This could still be a substantial cash-flow issue for many landlords.

"Many landlords and tenants may be faced with machinery and equipment which will not work on 1 January 2000. Embedded chips are difficult to find and harder to test but it is still by no means certain whether the failure of embedded systems will be merely a minor inconvenience or cause major chaos.

"Until the true extent of the problem reveals itself in the millennium, we are in the dark as to how much litigation year 2000 compliance will engender. Landlords should make all efforts to protect themselves in the intervening period of uncertainty by throwing the onus of millennium compliance onto their tenants in the leases between them.

"Landlords should also take every possible action to ensure compliance in the year 2000 of any embedded systems by undertaking equipment audits or contacting suppliers. As the scale of the problem is still unknown, a damage orliability limitation programme should be prepared and utilised if the need arises".