Quick Answer: Before switching elevator maintenance providers, conduct a comprehensive equipment service audit 3-12 months before your contract expires. This identifies deferred elevator maintenance, ensures your current elevator service provider fulfills contractual obligations, and prevents surprise repair bills from new providers claiming “pre-existing conditions.”
Key Takeaways:
- Pre-existing conditions are elevator maintenance deficiencies that exist before a new contract begins
- Most buildings switch elevator service providers without addressing these issues, leading to expensive surprise bills
- A pre-elevator audit approach saves 40-60% compared to reactive elevator repairs
- Professional elevator assessments cost is insignificant compared to the cost of deferred maintenance repairs, and pays for itself within a month or less
If you are responsible for elevator maintenance in your building, understanding pre-existing elevator conditions (or deferred maintenance) could save you tens of thousands of dollars and countless headaches. This is not just about choosing the right service provider; it is about fundamentally changing how you approach elevator maintenance contract transitions. The difference between a strategic approach and the industry’s typical reactive pattern can result in savings of $150,000 to $300,000 over a decade, in addition to improved safety, enhanced equipment performance, and significantly fewer sleepless nights dealing with elevator emergencies. Here is what you need to know.
What Are Pre-Existing Conditions in Elevator Maintenance?
Definition: Pre-existing conditions in elevator maintenance are deficiencies, deferred repairs, or equipment issues that exist before a new elevator maintenance contract begins.
These conditions include:
- Worn components requiring replacement
- Safety code violations
- Incomplete maintenance tasks from previous contracts
- Equipment adjustments that were never performed
- Deteriorating parts that haven’t been properly maintained
Analogy: Think of pre-existing conditions like buying a used car. You need to know about existing problems before the new owner (elevator service provider) takes responsibility, or you will end up paying for repairs that should have been addressed by the previous owner.
Common impact: When unaddressed, these conditions may create unfavorable contract terms between building owners and new elevator service providers and may create strife about who is financially responsible for preexisting condition repairs.
The Common and Costly Cycle Most Buildings Experience
Industry Pattern: The “maintenance provider merry-go-round” is the most common approach in elevator management, and it’s extremely costly.
How the Cycle Works:
Step 1 – Frustration Phase: Building owners become dissatisfied with their current elevator service company due to:
Poor responsiveness to service calls
Frequent elevator callbacks and breakdowns
Escalating maintenance costs
General is unhappy with the elevator service provider
Tenant complaints about elevator performance
Step 2 – Immediate Action: Without conducting an elevator assessment, building management:
Call numerous elevator service providers to bid on their elevators
Selects the lowest bidder or provider making the best promises
Signs new elevator maintenance contract
Transitions to a new elevator service provider
Step 3 – Surprise Costs: Within 1-3 months of the new contract starting:
New elevator service provider inspects equipment thoroughly
Building receives a substantial invoice for repairs and/or testing
Items are labeled “pre-existing conditions” (not covered under contract)
Costs range from $15,000 to $100,000+, depending on the number of elevators or escalators
The building did not budget for these costs
Step 4 – Repeat Cycle: Building switches providers every 3-5 years, and each time:
Pre-existing conditions from Provider A become Provider B’s “discovery”
Issues accumulate and compound over time
Each transition brings new surprise bills
The equipment condition gradually deteriorates
Financial Reality: Over a 10-year period, buildings trapped in this cycle can spend an extra $150,000-$300,000 in unnecessary costs, depending on the number of elevators.
This pattern isn’t just common; it is the elevator industry norm. In our 20+ years of consulting, we’ve seen this cycle repeat itself in hundreds of buildings across the country. The frustrating part is that building owners often think they are doing the right thing by switching providers when problems emerge. What they do not realize is that without addressing the underlying issues, they are simply transferring problems from one provider to the next while paying a premium at each transition. Understanding why buildings fall into this trap is the first step to avoiding it.
Why Buildings Get Trapped in This Cycle
Reason 1: Lack of Industry Knowledge
Problem: Most building owners and property managers don’t know that pre-existing conditions can and should be addressed before switching elevator providers.
Why it happens: The elevator industry’s technical complexity and specialized terminology can intimidate property managers who feel they lack the expertise to challenge elevator service provider assessments.
Reason 2: Urgency to Solve Problems
Problem: When elevators underperform and tenants complain, the instinct is to fire the elevator’s current provider immediately.
Why it happens: Taking time for an elevator assessment or elevator survey feels like a delay when immediate improvement is desired. Management wants quick solutions, not strategic planning. They are frustrated.
Reason 3: Budget Constraints
Problem: Buildings have money allocated for new maintenance contracts, but not for elevator consulting services or elevator equipment assessments.
Why it happens: Long-term savings from addressing pre-existing conditions are not as visible as the upfront cost of an elevator audit.
Reason 4: False Assumptions
Problem: Buildings operate with an “if it’s not broken, don’t fix it” mentality.
Why it happens: They assume that because elevators are running, maintenance must be adequate. Significant deferred elevator maintenance can exist even when elevators appear to function normally.
The Real Financial Impact of Ignoring Pre-Existing Conditions
Direct Costs Example:
Typical Scenario Timeline:
- Month 1-3: New provider discovers issues, sends $45,000 invoice for pre-existing needed elevator repairs or CAT1 testing and/or CAT 5 testing
- Month 3-6: Building negotiates down to $52,000, pays reluctantly
- Year 1.5 to 2: Major component fails ($75,000 repair + 2 weeks downtime) – issue that could have been identified in elevator assessment or elevator audit
- Year 3: Frustrated with ongoing problems, the building starts looking to switch elevator service providers again
- Month 37-39: New elevator service provider sends another pre-existing conditions invoice
10-Year Total Extra Cost: $150,000-$300,000 in unnecessary expenses or repairs that were covered in an existing full-service maintenance contract
Hidden Costs Beyond Direct Invoices:
-
Reduced Equipment Lifespan
- Proper maintenance: 25-30-year elevator lifespan
- Deferred maintenance approach: Major investment needed at 20 years, pending usage, service, and equipment installed
- Cost difference: $200,000-$750,000 per elevator for premature modernization, pending hydraulic or traction, and rise of the building
-
Increased Downtime
- Unaddressed issues cause more frequent breakdowns
- Longer repair times due to accumulated problems
- Average impact: 40% more downtime compared to properly maintained equipment
-
Risk and Liability Exposure
- Unresolved safety issues create liability risks
- Potential insurance premium increases
- Worst case: Serious accidents resulting in lawsuits
-
Lost Competitive Advantage
- Tenant satisfaction declines
- Difficulty attracting new tenants
- CAM increases the rental cost
- Decreased occupancy rates
-
Management Time Drain
- Property managers spend 10-15 hours monthly on elevator issues
- Building engineers are constantly engaged with issues and working with the elevator service provider
- Time value: $25,000-$55,000 annually in lost productivity
Total Hidden Cost Impact: $50,000-$100,000+ annually for medium-sized commercial buildings
The Strategic Approach: Audit First, Then Bid
Best Practice Timeline: Begin elevator assessment process 3-12 months before the current contract expires.
Phase 1: Comprehensive Elevator Service Assessment (Month 1-2)
What happens:
- Experienced elevator consultant surveys all equipment
- Examination includes:
- Controller assemblies
- Machine assemblies
- Cable systems
- Car assembly and guide systems
- Buffer systems
- Door operation and protection systems
- Hoistway entrance
- Signal assemblies
- And more- all based on hydraulic elevators, traction elevators, and escalators
Deliverables:
- Detailed condition report for each elevator or escalator
- Comparison of contracted services vs. actual services delivered
- Identification of all deferred maintenance items
- Recommendations
- Equipment performance benchmarking
- Short-term expenses and capital planning
Cost: Varies based on building size, number of elevators, rise, complexity, and geographic location. Contact us for a customized quote
Phase 2: Punch List Generation (Month 2)
What happens:
- Consultant creates a detailed punch list of deficiencies
- Items categorized by:
- Contractual obligations of the current provider
- Safety priorities
- Impact on equipment lifespan
- Cost to remedy, if any
Punch list typically includes:
- Maintenance tasks are not being performed per contract
- Adjustments and calibrations are overdue
- Component replacements covered under contract
- Safety corrections required by code
- Documentation and testing deficiencies
Phase 3: Current Provider Accountability (Month 3-6)
What happens:
- Punch list presented to the current service provider in month 2
- Provider must complete items covered under the existing contract
- Consultant monitors completion and quality
- Building receives the service they’ve been paying for
Benefits:
- Ensures full value from existing elevator contract
- Bring equipment to the proper standards
- Extends equipment lifecycle
- Improves safety compliance
- Eliminates ambiguity for the next contract
Common timeline: 2-4 months for punch list completion
This approach stops the accumulation of elevator deferred maintenance that otherwise carries forward from one provider to the next. Instead of compounding problems, you start each new contract with equipment in proper condition and clear documentation of its status.
Phase 4: Competitive Bidding (Month 7-9)
What happens:
- Elevator maintenance specifications sent to prospective elevator service providers
- Bidders survey properly maintained elevator equipment
- Clear documentation of equipment condition provided
- No unknown deficiencies to inflate pricing
Results:
- 15-40% more competitive bid pricing
- Apples-to-apples comparisons
- Service providers bid confidently without excessive risk premiums
- Clear baseline for new contract performance
Phase 5: Smooth Transition (Month 10-12)
What happens:
- New elevator service provider takes over equipment in documented condition
- No surprise repair bills
- Clear accountability from day one
- Better long-term relationship
Creating a Level Playing Field for Competitive Bidding
Without Elevator Audit:
Bidder perspective:
- Unknown equipment condition = high risk
- Must add 20-50% risk premium to pricing
- Include extensive exclusions in proposals
- Conservative estimates on the life cycle
Building owner receives:
- Inflated bids protecting against unknowns
- Wide pricing variance (difficult to compare)
- Vague contract language about pre-existing elevator conditions
- Limited competition (some companies won’t bid on uncertain situations or will offer an oil and grease contract)
With Elevator Audit:
Bidder perspective:
- Documented equipment condition = low risk
- Competitive pricing for maintaining properly serviced elevator equipment
- Transparent about what’s included/excluded
- Confidence in the scope of work
Building owner receives:
- True competitive market pricing
- Comparable proposals (easier decision-making)
- Clear contract terms
- More bidders are willing to participate
Savings comparison: (based on example situation)
- Without audit: Average bids $8,000-$12,000 per elevator annually + surprise repair bills
- With audit: Average bids $5,500-$8,000 per elevator annually + minimal surprises
- First-year savings: 20-35% on contract costs + avoidance of $30,000-$100,000 in surprise bills
Real-World Cost Comparison
To illustrate the financial impact clearly, let’s compare two identical buildings taking different approaches to their maintenance contract transition. These aren’t hypothetical numbers; they’re based on actual case studies from buildings we’ve worked with. The contrast is striking and demonstrates why the strategic approach consistently outperforms the reactive one.
Scenario A: Traditional Approach (No Audit)
10-Story Commercial Building, 4 Elevators:
Year 1:
New maintenance contract: $40,000
Pre-existing condition repairs (Month 3): $52,000
Emergency repairs: $8,000
Total: $100,000
Year 2-3:
- Annual maintenance: $40,000 x 2 = $80,000
- Additional repairs: $25,000
- Total: $105,000
Year 4:
Major component failure: $75,000
Annual maintenance: $40,000
Additional repairs: $12,000
Total: $127,000
Year 5:
Switch providers again: $40,000
New pre-existing conditions: $38,000
Total: $78,000
5-Year Total: $410,000
Scenario B: Strategic Elevator Audit Approach
Same 10-Story Building, 4 Elevators:
Year 0 (Pre-transition):
Professional audit: $3,000
Current provider completes punch list: $0 (contractual obligation)
Total: $3,000
Year 1:
New maintenance contract (competitive pricing): $32,000
Pre-existing repairs: $0
Routine repairs: $0
Total: $32,000
Year 2-3:
Annual maintenance: $32,000 x 2 = $64,000
Routine repairs: $0
Total: $64,000
Year 4:
Annual maintenance: $32,000
Routine repairs: $0
Total: $32,000
Year 5:
Annual maintenance: $32,000
Routine repairs: $0
Total: $32,000
5-Year Total: $163,000
Total Savings: $250,000 by doing an elevator audit
What Professional Elevator Audits Include
Equipment and Service Assessment Components:
1. Mechanical Systems Evaluation
Machine room equipment condition
Motor and controller
Gearing and drive system
Brake system
Generator/power supply
2. Safety Systems Review
• Governor
• Safety brake
• Buffer condition
• Emergency communication systems
• Fire service operation
• Seismic requirements, if applicable
3. Operational Performance Testing
• Speed accuracy measurements
• Door timing and operation
• Floor leveling precision
• Call response times
• Leveling
• Ride quality
4. Code Compliance Verification
• Current local code requirements
• ASME A17.1 compliance
• ADA accessibility standards
• Recent code changes applicability
• Required modifications
5. Maintenance Contract Audit
• Contracted services vs. delivered services comparison
• Service visit frequency verification
• Required maintenance tasks completion
• Callback response time analysis
• Service documentation review
• Testing Records
Deliverable Report Includes:
Executive Summary:
1. Overall equipment condition rating
2. Critical findings requiring immediate attention
3. Estimated costs for bringing equipment to standard
4. Recommendations for contract specifications
Detailed Equipment Analysis:
1. Individual elevator condition reports
2. Component assessment
3. Remaining useful life estimates
4. Photographs documenting conditions
5. Performance test results
Maintenance Service Analysis:
1. Service visit logs and verification
2. Contracted hours vs. actual hours worked
3. Maintenance tasks completed vs. required
4. Response time performance
5. Invoice analysis and billing accuracy
Action Plan:
1. Prioritized punch list items
2. Items covered under the current contract
3. Items requiring capital investment
4. Timeline for remediation
5. Cost estimates for all corrections
Bidding Specifications:
1. Scope of work for new contract
2. Equipment baseline documentation
3. Performance standards and expectations
4. Recommended contract terms
At this point, you likely have questions about the elevator audit process itself. These are questions we hear repeatedly from building owners and property managers who are considering this approach for the first time. The concerns are legitimate, and understanding the answers helps you make an informed decision about whether and how to proceed. Here are the most common questions we receive and straightforward answers based on thousands of audits we have conducted nationwide.
Common Questions About Elevator Audits
Q: How long does an elevator audit take?
A: Comprehensive audits typically take 2-4 weeks from start to final report delivery. The actual on-site survey takes 1-2 days per building, depending on the number of elevators.
Q: What does an elevator audit cost?
A: Professional audits range depending on:
Number of elevators
Building complexity
Rise of building
Geographic location
Scope of assessment
Depth of reporting required
Average cost per elevator: Varies significantly based on the factors listed above. Contact TEC for a detailed quote based on your specific building.
Q: Will my current elevator service provider cooperate with punch list completion?
A: Reputable service companies understand contractual obligations and typically cooperate. If they do not:
Review contract terms with legal counsel
Document non-compliance
Consider early contract termination if appropriate
Q: What if the audit reveals major capital expenditures needed?
A: This is valuable information for planning purposes:
Budget for necessary modernization
Prioritize safety-critical items
Determine who pays for what before the new contract
Adjust timeline if needed
Make informed decisions rather than being surprised later
Q: Can I use my current provider for the audit?
A: No, this creates a conflict of interest. Use an independent elevator consultant who:
Has no financial ties to service providers
Provides an objective assessment
Advocates solely for building owner interests
Has extensive industry experience (30+ years average)
Q: How often should elevator audits be performed?
A:
Before every contract transition (every 3-5 years)
Mid-contract check-ins (every 18-24 months)
Before building a sale or purchase
After acquiring new properties
When performance problems emerge
Q: What’s the difference between an audit and an inspection?
A: An Inspection is a code compliance check by the regulatory authority (annual/periodic requirement) An Audit is a comprehensive assessment of equipment and service condition, maintenance delivery, and contract compliance by an independent elevator consultant. Note that it is common for an audit to be called an elevator audit, elevator inspection, elevator survey, elevator assessment, elevator review, elevator punch list audit, and many others.
Key distinction: Inspections verify minimum safety standards. Audits verify optimal performance and contract fulfillment.
The Other Side: Considerations and Challenges
Challenge 1: Upfront Investment Required
Reality: Professional elevator audits are priced as a fixed fee determined upfront, depending on the number of elevators, stories, location, etc.
Considerations:
Some building budgets don’t include consulting line items
Cost seems like an “extra” expense
Hard to justify if the elevators appear to be working
May require a budget approval process
Counter-perspective:
Elevator Audit typically pays for itself within the first month
Prevents $30,000-$100,000+ in surprise repair bills
Long-term ROI is 10:1 or better
Can be financed or amortized over the contract period
Challenge 2: Time Investment Required
Reality: Process takes 3-12 months from elevator audit through transition.
Considerations:
Requires advance planning
Can be implemented if the contract expires in 2-3 months, with a request to expedite
Punch list completion takes time
May feel slower than the immediate provider switch
Counter-perspective:
Planning prevents emergencies and rushed decisions
Time investment prevents years of problems
Proper transitions save management time long-term
Smooth process reduces tenant disruption
Challenge 3: Current Provider Resistance
Reality: Not all service providers respond cooperatively to punch lists.
Possible resistance tactics:
Disputing which items are covered under the contract
Claiming items are capital expenditures (not maintenance)
Slow completion or incomplete work
Threatening to leave the contract early
Retaliating with reduced service quality
How to handle:
Document everything in writing
Review contract language carefully with legal counsel
Set deadlines for completion
Use a third-party elevator consultant to verify completion quality
Be prepared to enforce contract terms
Consider early termination if non-compliance is severe and the contract allows it per legal
Success rate: 85-88% of service providers complete punch lists when properly documented and presented professionally.
Challenge 4: Discovered Capital Needs
Reality: Audits may reveal problems requiring significant investment beyond routine maintenance.
Common discoveries:
Obsolete controllers requiring modernization
Code violations demanding upgrades
Structural issues in the hoistway or machine room
Equipment beyond economical repair
Obsolete elevator parts or parts difficult to source
Safety systems needing replacement
Cost implications: $150,000-$500,000+ per elevator for full modernization, depending type and rise
How to address:
Prioritize safety-critical items first
Phase capital improvements over time
Include elevator modernization planning
Adjust budget forecasts accordingly
Consider long-term elevator equipment replacement planning, if viable
Silver lining: Better to discover these issues through a planned elevator audit than an emergency failure.
Challenge 5: Relationship Management
Reality: Some building owners worry about damaging relationships with current providers.
Concerns:
The provider may take the audit personally
Could affect service quality during the notice period
Awkward if you want to include them in rebid
May receive pushback or defensive responses
Balanced perspective:
- Professional service companies expect accountability
- Contract fulfillment should be standard, not a favor
- If the provider becomes defensive, that’s valuable information
- Good elevator service providers welcome the opportunity to demonstrate performance
- Your obligation is to the building owners/tenants, not the service provider’s comfort
These challenges are real and deserve consideration. We have seen building owners struggle with each of these issues, and it is important to acknowledge that the strategic approach is not without its difficulties. However, when weighed against the financial and operational costs of ignoring pre-existing elevator maintenance conditions, the surprise $50,000 repair bills, the compounding equipment failures, the tenant complaints, and the management headaches, the strategic approach consistently proves superior. The challenges are temporary and manageable; the benefits are substantial and lasting. The question is not whether there are obstacles, but whether those obstacles justify continuing a pattern that costs you hundreds of thousands of dollars over time.
Making an Informed Decision
Key Decision Factors:
Choose Pre-Audit Approach If:
- You have 3-12 months before contract expiration
- The budget allows for the cost of the assessment
- You’ve experienced surprise repair bills in the past
- Your elevators have performance or reliability issues
- You’re unsure if the current provider fulfills the contract
- You want competitive, accurate bid pricing
- Long-term cost savings are a priority
- You’re buying or selling a building
Consider Immediate Switch If:
- Really never
- Absolute emergency situation (safety hazard)
Reality Check: Even in emergency situations, a rapid assessment (2-week process) is preferable to a blind provider switch.
Return on Investment Analysis:
Average Building:
- Audit cost: $8,000
- First-year contract savings: $8,000 (20% reduction)
- Avoided pre-existing repairs: $45,000
- First-year net savings: $45,000
- 5-year net savings: $150,000-$250,000
- ROI: 1,875-3,125%
The Math is Clear: Buildings that conduct proper elevator assessments before contract transitions save 40-60% compared to a reactive approach.
Breaking Free from the Maintenance Provider Merry-Go-Round
The Transformation:
Old Pattern (Reactive): Provider A (Years 1-5) → Frustration → Quick switch → Provider B + $40K surprise bill → Provider B (Years 6-10) → Frustration → Quick switch → Provider C + $55K surprise bill → Repeat forever
New Pattern (Strategic): Provider A (Years 1-5) → Month 6 of Year 5: Audit → Punch list completion → Competitive bidding → Provider B with clean baseline → Provider B (Years 6-10) with proper maintenance → Minimal surprises → Equipment lifespan extended
Long-Term Benefits:
Financial:
40-60% cost reduction over 10 years
Predictable budgeting
Extended equipment lifespan
Maximized ROI on capital investments
Operational:
40% reduction in downtime
Better tenant satisfaction
Fewer emergency situations
Improved building reputation
Management:
Less time spent on elevator issues
Reduced stress and complaints
Clear accountability measures
Data-driven decision making
Safety:
Code compliance maintained
Hazards identified and corrected
Liability exposure reduced
Documented safety protocols
Understanding the problem is one thing, and taking action is another. If you’ve read this far, you recognize that the traditional approach to elevator maintenance contract transitions is fundamentally flawed. You understand the financial impact of ignoring pre-existing elevator conditions and the benefits of a strategic elevator audit-first approach. Now the question is: what do you do next? The answer depends entirely on your timeline. Here is exactly what to do based on your current situation, with specific action steps you can implement immediately.
Action Steps for Building Owners for Service Contract
Timing is flexible based on the client’s situation
Month 1:
1. Research and select an independent elevator consultant
2. Review current maintenance contract terms
3. Budget for audit
4. Communicate the plan to stakeholders
Month 1-1.25:
1. Schedule and complete a comprehensive audit
2. Review findings and recommendations
3. Present punch list to current provider
4. Set completion deadlines
Month 1.25-1.5:
1. Monitor punch list completion
2. Verify the quality of work
3. Document equipment condition
4. Prepare bid specifications
Month 1.5-2:
1. Send specifications to qualified bidders
2. Host site walk-through
3. Review and compare proposals
4. Negotiate terms with top candidates
Month 2-2.5:
1. Select a new elevator service provider
2. Execute contract
3. Manage a smooth transition
4. Establish performance monitoring
Conclusion: Why Strategic Approach Wins
The data overwhelmingly support pre-transition audits:
Financial Evidence:
1. 40-60% cost savings over a reactive approach
2. Audit costs are recovered in less than a month in most cases
3. $150,000-$300,000 saved over 10 years (average building)
4. 15-30% more competitive bid pricing
Performance Evidence:
1. 40% reduction in equipment downtime
2. 25-30% extension of equipment lifespan
3. Smoother provider transitions
4. Fewer tenant complaints
Risk Management Evidence:
1. Eliminated surprise repair bills
2. Improved safety compliance
3. Reduced liability exposure
4. Better documentation for due diligence
The Bottom Line: Whether you want to address pre-existing conditions strategically before bidding or reactively after signing a new contract (when you have far less leverage and will certainly pay more) is entirely your choice. But the evidence is clear, strategic wins every time.
Breaking free from the maintenance provider merry-go-round requires changing your approach from reactive to strategic. Instead of responding to problems by quickly switching providers, take a planned pause to assess, address, and document your equipment’s true condition.
Your elevators, your budget, your tenants, and your peace of mind will all benefit from this more thoughtful approach to elevator maintenance contract management.
About The Elevator Consultants
Founded in 2003 and headquartered in Chicago, The Elevator Consultants (TEC) is a trusted authority in vertical transportation consulting, serving clients nationwide. With an average team experience of 30+ years in the elevator industry, TEC provides independent elevator assessments, maintenance contract audits, modernization project management, and proprietary ElevatorApp™ software for real-time equipment monitoring.
Services Include:
1. Elevator maintenance contract audits
2. Pre-bid equipment assessments
3. Maintenance specifications and bid management
4. Modernization project management
5. Expert testimony and litigation support
6. Real-time monitoring via ElevatorApp™
Contact: 312.519.9949 | info@theelevatorconsultant.com | www.theelevatorconsultants.com