The Coming AC Wars

Real Estate

As if negotiating real estate transactions isn't tough enough, there is a huge issue that is right around the corner. Older AC units will be obsolete in 2020.

Houses built as recently as the late 1990's are likely to have AC systems that use FREON, a refrigerant commercially called R-22. FREON was classified as an environmental hazard and will become illegal as of January 1, 2020.  Today, if an old unit requires service,  the AC technician must use FREON from a dwindling supply. Since the available supply of FREON is diminishing, the cost is soaring. By 2020 FREON will be illegal and the only source will be FREON that is salvaged from dismantled units. 

An alternative to R-22 is an expensive blend of refrigerants. Technicians will have to be specially trained to use it, and it will cost thousands to keep these old systems going. The blend can also damage the older equipment. Not all systems can use the substitute refrigerant blend. Homeowners will have to decide if it is worth putting good money into an old, inefficient system.

We fully expect this issue to become a more significant negotiating item than in the past. By 2020, if an AC unit is determined to be functioning poorly, the only solution will be to replace the entire heating and AC system. This will put extra emphasis on home inspections, and the only remedy for a poorly-performing AC will be a total replacement.

We feel that buyers will likely be asking what type of system is installed in older homes so that they can make an informed decision about a house. Likewise, sellers may want to consider replacing older units with high-efficiency units. A new AC and heating system is a great upgrade to advertise, will increase a home's value, and sellers can likely claim a big tax credit in the process. 

We strongly believe that home buyers should understand everything about the house they are buying for their own satisfaction, and to reduce liability. Don't get caught by surprise! Consider having a pre-listing inspection on your next listing so you can deal with this issue early in the sales cycle.

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