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Home warranty's might not cover old AC units after January 1st!

By
Home Inspector with Trace Inspections, LLC TN #17

It's not like we don't have enough to worry about!  As of January 1, 2010, a new Environmental Protection Agency (EPA) mandate changed the way your clients' home air conditioners are serviced and repaired. At that time, manufacturing HVAC equipment that primarily utilizes Freon® (also known as R-22 and HCFC-22) will be banned, and the nation will begin using products such as Puron® (also known as R-410A) as the standard refrigerant for air conditioners. 

This change will affect buyers and sellers in many ways:

 Repair costs will increase

A variety of factors will lead to increased costs:

• R-22 parts may no longer be available.

• Since R-410A parts are not always interchangeable with R-22 parts, replacement of the entire system might be necessary.

• Physical changes to your system may be needed to accommodate the larger equipment required in air conditioners using R-410A refrigerant.

• The supply of R-22 refrigerant will be limited, causing the price to increase.

• Repairs may take longer because you may want to explore your options and wait for less expensive parts, if they are available.

• New HVAC equipment may be more expensive to purchase and install

Manufacturers' warranties may not provide full coverage

Typical manufacturers' warranties only cover parts for one year, in most cases. Labor is a significant part of any repair. Each manufacturer may take a different position if an R-22 system cannot be repaired or parts are not available.

System and appliance warranties/ service contracts typically exclude coverage resulting from government mandated changes

Most system and appliance home service contracts/warranties contain language that effectively excludes the additional costs resulting from this government-mandated change. Each home service contract may deal with this situation differently.

Disclosure Responsibility as an agent and for the owner:

You may want to consult a licensed real estate attorney to determine if there are specific disclosure requirements. You may also want to:

• Consider adding a disclosure form that details the potential impact of the new refrigeration requirements with all home sales.

• Offer a home service contract/ warranty on each transaction that includes R-410A coverage from a company that covers the transition.

• Have the parties to the transaction sign the disclosure form as evidence that they were made aware of the R-410A issue and were offered a home service contract/ warranty.

• Select a company with R-410A coverage in the base plan. This can be far too costly for your home buyers, to leave to chance or options

Changes like this are difficult and seldom understood by the general public.  Home inspectors at times can ID the type of refrigerant that a system might have in it, but at times it just can not be done.  So if you have an older unit say around 6-8+ years of age, it could have R-22 in it.  Pretty much everything over 10 years of age will have R-22 in it. 

This is what the EPA has to say on their site about R-22 and why the changes are being implemented. 

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Providing quality residential home inspections and commercial evaluations since 1995 

Serving All of Middle Tennessee

Trace Inspections, LLC is an independent home inspection company owned by nationally recognized consultant and inspector Scott Patterson. We are able to serve a large part of middle Tennessee from our centrally located Williamson County TN location, just a few miles south of Nashville.

Charles Buell
Charles Buell Inspections Inc. - Seattle, WA
Seattle Home Inspector

Scott, Carrier has been using Puron since 1996----about 14 years----most carrier units prior to that are going to be about done anyway.  Other manufacturers apparently get on board until about 2002----so a lot of those units will certainly be affected by the switch to Puron and may not be worth putting a lot of money in to---not to mention voiding warranties----in about 5 years it will be a relatively moot points as most of the units with non-Puron type refrigeratants will be up for replacement.  Would you agree with this assessment?

Mar 03, 2010 07:30 AM
Scott Patterson, ACI
Trace Inspections, LLC - Spring Hill, TN
Home Inspector, Middle TN

Hi Charles,  Yes, I agree!

Most HVAC units that are from the late 1990's and early 2000 are going to be on their last leg anyway here in the South.  If we can get 7-10 years out of a unit we are doing good!

I think all Scroll compressors use Puron regardless of their age.

Mar 03, 2010 07:40 AM
Mike Gillingham
Eastern Iowa Inspection Services LLC - Walker, IA

I think the EPA is an overblown monster that should never have been created. They have there tentacles in just about every aspect of American life. I like the old R-22 better. It was more effecient, ran at lower temperatures etc... The EPA freaks out because of the perceived damage it can cause when released. I have never known an HVAC guy to release it into the air for the heck of it. It's better to capture it. 

It's a good idea to read ALL the print in any home waranty. Thanks for the info!

Mar 06, 2010 11:25 PM
Gene Allen
Fathom Realty - Cary, NC
Realty Consultant for Cary Real Estate

Thanks for the info.  This has been going on for several years in prepartion.

Mar 15, 2010 02:04 PM
Anonymous
Kim KW Virginia

American Home Shield is covering the switch over in their Basic Coverage. Most of the other companies raised their prices. My rep provided me with a handout from the EPA that answered a lot of my concerns. AHS has the best coverage for my clients and I get the most awesome service from my rep.

Mar 25, 2010 03:03 PM
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