A simple Guide to Elevator Maintenance Contracts. Understand the critical items and calculate elevator maintenance cost.
It’s that time again: your elevator maintenance contract is expiring, and you need to renegotiate.
The document is long and complicated. How do you know what’s most important?
How do you know which companies can maintain your elevators?
This article will help with that. Let’s dig into the nitty-gritty details of your elevator maintenance contract and extract the critical items.
The guide will cover the following topics:
- Elevator Maintenance Cost
- Elevator Maintenance Contract Termination Language
- Elevator Repair
- Elevator Maintenance Companies
- How to Avoid Poor Elevator Maintenance
- Elevator Maintenance Checklist and Records
- Elevator Maintenance Contract Types
- Emergency Callback Service
- Contract Exclusions
- Elevator Maintenance Contract and Review Service
Let’s get started.
1. Elevator Maintenance Cost
Elevator service costs are a significant portion of your building’s operating budget. Making sure you’re getting a fair market price is important.
Therefore, we’ll start by discussing the cost of elevator maintenance.
How Much Does Elevator Maintenance Cost?
Elevator maintenance costs can range from $80 per month to $750 per month. Costs depend on the type of elevator, location, building height, and level of service. High-rise traction elevators cost more to maintain than low-rise hydraulic elevators.
Elevator Maintenance Cost Calculator
How much should you spend on elevator maintenance?
We built a simple tool to perform an elevator maintenance cost analysis for your building.
Then we organized the data based on location, coverage type, and building type to give you a quick calculation of what elevator maintenance should cost in your building.
Feel free to check elevator maintenance costs for your building.
Negotiate Your Elevator Service Contract For A Better Price
Look out for opportunities, big and small, to save money and continue receiving the service you need. If you sign on for long-term service (5 years or longer), your elevator contract price could be cut by 5% or 10%. If you own multiple elevators, you may be able to negotiate a “bulk” price.
Some other areas to look for reduced cost are:
Annual Price Adjustment
If you’re on a multi-year contract, your service provider may have a language that allows for gradual price adjustments year-over-year.
You can negotiate this by asking for a ceiling on adjustments not to exceed a percentage you’re comfortable with (you may also try for no adjustments at all).
Control Trouble Call Costs
When things go wrong, it’s not the time for your elevator service provider to cash in. Rather than allowing for expensive overtime costs, negotiate your hourly rate for service calls.
Even if you select 24/7 service coverage, you will inevitably receive a bill. Some elevator service failures may be outside of your contract.
What are those hourly rates?
Make sure your contract specifies the billable hourly rate. We’ll discuss this in more detail below.
Elevator Monitoring and Internet Connectivity
Connect your elevator to the internet to get full elevator capabilities. You’re buying a sophisticated piece of equipment. Sometimes for just a small fee, you can upgrade the unit to diagnose problems before they happen which would pay off over time.
2. Elevator Maintenance Contract Termination Language
Before a new contract starts, you should always consider how it will end. What will happen at the end of contract? What will happen if someone doesn’t perform to the terms of the contract?
Here’s what you need to know.
Contract Auto Renewal Terms
Most elevator maintenance contracts include an auto-renewal clause, an evergreen clause, or a roll-over clause (all three mean the same thing). If you want to negotiate a new agreement, you should first check the termination language on your existing contract, more specifically you should check when, or if, it renews.
Did your contract already renew?
Many contracts require written termination notice three months before the end date. Otherwise, it may automatically renew for another term. Double check your current contract termination language.
Some states have no regulations for auto-renewing contracts, which could lock you into another five-year term without your knowing.
Consider signing for just the original term, then make sure the contract is written to renew month to month after the initial term expires.
Non- Performance Termination Language:
When entering a long-term agreement, it’s difficult to predict what will happen a few years from today. Whatever happens, you’ll always be concerned with a companies ability to keep ongoing reliability and code compliance.
What if they can’t keep your elevator in service?
What if they fail to keep the elevator code complaint?
Assuming it could happen (and it can), you should consider adding language which would allow for early termination based on your provider’s failure to perform.
3. Elevator Repair
The set monthly service price is usually the focus of an elevator bid, which is a good strategy.
However, you shouldn’t overlook elevator repair costs.
Elevator repair costs average an additional 30% to 40% of what you already pay for elevator maintenance. For every dollar you spend on monthly maintenance, you should expect to spend an additional 30 to 40 cents on elevator repairs.
For example, a courthouse in West Virginia that spends $1,000 per month on elevator maintenance paid $21,000 for an elevator repair. Over a five year contract, the repair cost them an additional 35% of what they pay for maintenance. And that doesn’t include other repairs and service calls.
How does this relate to your elevator maintenance contract?
Your maintenance contract can be used to reduce future elevator repair costs. And purchasing power is maximized while you’re in the market for maintenance.
Let’s discuss a few ways you can take advantage of your opportunity.
Additional Quotes from Elevator Repair Companies:
Your maintenance contract should allow you to seek competitive bids from multiple elevator repair companies.
For example, let’s assume you are midway into a five-year contract and an expensive repair comes up. Should you be forced to pay your elevator maintenance company the price they come up with? Should your contract prevent you from getting competitive bids?
No. Of course not.
But some elevator contracts don’t allow it, like this contract used by Teton County, WY.
We suggest rewriting this section of the contract to allow bids from other elevator repair companies.
Elevator Mechanic Hourly Rates:
The elevator mechanic hourly rate should be negotiated upfront and added to the maintenance contract. This strategy will cap hourly costs and reduce the total cost of repairs for the life of the elevator contract.
Without hourly rates built into the contract, your cost is uncapped.
For example, the Teton County, WY contract (see the section above) did not include an hourly rate for elevator mechanic work. Service requests and repairs can bill at any price.
Consider adding elevator mechanic rates while you are negotiating the maintenance contract.
Elevator Repair Costs:
The best opportunity to save money on elevator repair costs is during the maintenance bid. You maximize purchasing power when you bundle repair projects with your maintenance contract.
We’ve built a free Elevator Repair Cost Calculator to help you estimate your next project. If a project is within your budget, you should secure the repair and maintenance price at the same time.
Feel free to use our free elevator repair calculator.
4. Elevator Maintenance Companies
While having a good elevator contract is essential, having the right elevator company is more critical for elevator reliability.
How do you pick the best elevator company for your equipment?
Choosing an Elevator Maintenance Company:
Before we discuss which elevator companies can service your equipment (section below), let’s review factors to consider when picking a company.
Here are five questions to ask about a company before you hire them:
- How much experience do you have with the elevator controller type in our building?
- Do you own all of the diagnostic tools required to troubleshoot my elevator controller?
- How many elevators does the proposed elevator mechanic have on his or her route?
- Are you prepared to add performance guarantees into the contract?
- How is your emergency overtime coverage handled?
Picking the best company for your building is an important decision. We recommend reading our article on the Top 14 Factors When Choosing an Elevator Company.
Can Other Companies Maintain My Elevator?
As you consider elevator service in your building, you’ll likely wonder if another company can take over. You may ask how well a company, who didn’t manufacture the elevator, can keep the equipment running. Or maybe you’ll ask how another company can locate repair and replacement parts.
Those are all important questions.
Let’s consider a few things:
Independent Elevator Maintenance Companies:
There are thousands of independent elevator service companies in the USA and Canada. These independent companies don’t manufacture elevators. They wouldn’t be in business if they couldn’t maintain different types of elevator equipment by different kinds of manufacturers.
Major Elevator Maintenance Companies:
Non-independent companies, usually called Original Elevator Manufacturers (OEMs) or “Majors”, have a large workforce throughout the world. -If not an independent elevator company, the major companies also maintain equipment by other manufacturers. These companies have multi-million dollar research and development budgets to reverse engineer the equipment manufactured by the competition.
Elevator Repair and Replacement Parts: Which Elevator Maintenance Company Has Access to The Parts You Need?
If an elevator company didn’t manufacture the equipment, how do they get parts?
All of the major elevator manufacturing companies have dedicated sister companies to sell components they manufactured, to their competitors, who now maintain the equipment.
These subsidiary businesses are multi-million dollar business on their own.
Have a look for yourself:
Need to buy a replacement part on an Otis elevator? Unitec is a dedicated company, owned by Otis, whose primary business is supplying competitors with Otis manufactured parts.
Vertical Express is owned by ThyssenKrupp, which is a company dedicated to selling parts for elevators they manufactured. They also sell replacement parts for elevator companies they acquired, such as Dover Elevator Company.
Kone Spares is a company dedicated to selling parts for Kone manufactured elevators and escalators. They also offer parts for other manufacturers like Schindler and ThyssenKrupp.
Adams Elevator is Schindler’s company dedicated to selling parts to companies that are not Schindler. They also design and produce their own safety products.
In short, it’s possible to locate replacement parts for equipment manufactured by different elevator companies.
Non-Proprietary Equipment Elevator Types
There are many types of elevators which are widely known to be maintainable by all elevator companies. There are also dedicated manufacturers that only build non-proprietary equipment.
5. How to Avoid Poor Elevator Maintenance
Most buildings only notice lack of maintenance after the elevator fails, or after an inspector issues a citation.
If elevators are critical for your building, then you should consider performing regular audits and tracking additional metrics. This way you can identify a lack of maintenance before a failure or inspection citation.
What additional metrics should you track?
How Often Should an Elevator be Serviced?
Dedicated elevator maintenance time in your building is essential for reliability. You and your neighbors are competing for your elevator mechanic’s time. A neighbor with a problematic elevator will decrease dedicated maintenance time in your building. This problem is then multiplied by the number of elevators on a mechanic’s route.
How do you make sure mechanics give your building the maintenance time it needs?
Signing an elevator contract with minimum maintenance hours will make sure you’re getting the required time when you need it most.
The total minimum hours for elevator service will depend on the unit type, usage, and age. You can contact us to figure out how much maintenance your unit would need. Then consider adding the minimum number of hours to your contract.
Most buildings sign elevator service contracts written by the elevator maintenance provider.
Do you think a contract written by your provider will lean in-favor of… your provider?
As just one example, they’re going to limit the performance metrics and requirements spelled out in the contract. The only listed metric will be a safety test, which is essential, but what about the performance and reliability of the elevator itself?
What about a unit that’s out of service for weeks?
What about repeat issues that never get fixed and cause all kinds of grief for a building?
In addition, when you use the boilerplate contract created by the elevator maintenance company, it won’t capture the specific needs of your building. An office building, condo, or hospital won’t all have the same passenger traffic, tenant demands, or building needs. Shouldn’t each building type have a different scope listed in the contract?
Make sure you understand the metrics which are most important to your building, tenants, and passengers – consider elevator performance metrics. Then add those metrics to your maintenance contract. This will ensure a level of ongoing reliability.
Elevator Maintenance Control Program
The Occupational Safety and Health Administration (OSHA) and The American Society of Mechanical Engineers (ASME) have several requirements in place that ensure elevators and escalators are safe and secure for use. Plus, recent elevator code requires elevator maintenance control programs on site.
This includes all parts of the elevator’s operation from travel, speed, emergency equipment, telephone communication and doors.
Essentially, any aspects of the elevator that affect the safety and convenience of the riders in your building must be regularly checked.
Your elevator maintenance contract should cover preventative service on all of these pieces. Basic services on your elevator, as stated in your service contract, should include:
- Inspection and Safety Testing: Inspections are according to the local law. This could include semi-annual, annual, and five-year testing of the elevator or escalator. Monthly fire service operation tests may also be required. Check to make sure the local requirements are included. If you’re in New York City, you should consider elevator door lock monitoring code.
- Lubrication: Smooth elevator operation requires smooth gliding for guides, rails, suspension, and safety machines.
- Performance Testing: Regular mechanical testing of the elevator control system, acceleration and deceleration system, and all safety features.
- Reviewing: Elevator’s mechanical condition, making any replacements of gears, brakes, bearings, or ropes.
6. Elevator Maintenance Checklists and Records
Understanding your elevator maintenance providers ongoing plan and written record of work they complete will help ensure reliability.
Tracking elevator service history is critical to understanding what level of service you’re getting. It’s vital to pinpointing issues and problems to find the correct solutions. It also helps you track which solutions are working and who solved the problems.
Make sure that part of your contract includes a system to monitor elevator performance and maintenance history.
Wondering how your elevator stacks up to other buildings throughout the USA? Let us review your elevator performance history here.
Elevator Maintenance Checklist:
It’s important to understand the minimum code requirements. If you’re looking for more detail, check with the National Elevator Industry, Inc. (NEII) – a trade association of the building transportation industry which is dedicated to elevator safety, code, and regulation.
They provide a great elevator maintenance checklist PDF which details each task and corresponding paragraph in the elevator code.
7. Elevator Maintenance Contract Types
Your contract may explicitly state the type of service you have. If it does not, you can take a look at the preventative services provided to get a better idea.
If you have concerns that your elevator isn’t being serviced with the types of upkeep you’d like on a regular basis, it may be time to reconsider your contract type.
Common elevator maintenance contract types include:
Full Service Elevator Maintenance Contract:
In this type of elevator service contract, the service provider takes full responsibility for the elevator. The cost to prevent failure and fix failures are included in the contract. The contract also includes preventive maintenance. Similar to an insurance policy, this contract type helps you fix the monthly elevator cost. It’s important to consider the components which are included and excluded from the contract.
Partial Service Elevator Maintenance Contract:
This includes the same coverage as Full Service, except major components are excluded. This would include larger items like pumps, valves, controllers, elevator machines, generators, cables, and other pieces of equipment. While the monthly costs of this contract are less, the total cost you pay is not fixed. The total elevator expense is less predictable.
Oil and Grease Elevator Maintenance Contract:
This basic elevator contract includes inspecting and lubricating your elevator’s moving parts. While this does cover basic regulations and codes, if something goes wrong and repairs are needed, they will be billed at an additional charge not covered by your monthly payment. In addition, the costs for service calls are typically excluded.
8. Emergency Callback Service
The maintenance portion of the contract is essential, but you still need to consider callback coverage. There are different options for hours of coverage. It would help if you decided which works best for you.
Elevator Phone: You’ll need to make sure 24/7 coverage is included. This is one of the most common items on an inspection violation. There are cellular elevator phones and consolidated phone services which can save you hundreds per month. Make sure you consider options for each.
9. Contract Exclusions
Every elevator maintenance contract will have exclusions. Make sure the excluded components are clearly outlined. Excluded items will lead to unexpected elevator invoices.
If a component is excluded, it’s important to understand the expected cost and risk for future failure.
If your elevator maintenance company writes the contract, you might want to take extra caution to the items that are excluded. Some components on elevators can cost half as much as a brand new elevator for the materials and labor to replace or repair.
Stored Parts on Site: Leaving an elevator out of service while waiting on parts, over a weekend, is not a huge deal for an office building. But what about a condo with only one elevator?
It would help if you considered the components of each piece of equipment that fail the most. Make sure those items are stocked on site as part of the elevator service and repair agreement.
10. Elevator Maintenance Contract Template and Review Service
Each building and elevator system is different. Instead of a blanket contract created by your elevator maintenance provider, your elevators need a service agreement tailored to your building.
Get started with our elevator maintenance contract builder which is customized to the demands of your building and the condition of your elevators. Do you already have an elevator service agreement? Would you like us to review? We can help with that too.
Is your elevator contract serving you? Does the service meet your current needs? Are there opportunities to save money? These are all things to consider when reevaluating your contract.
If you have further questions, the ElevatorLab team is happy to answer them.
We help elevator owners make the best decisions for their businesses to keep their tenants happy and safe.