Before closing, a buyer should establish the actual condition and remaining useful life of every conveyance, the status of required testing and code compliance, the terms and transferability of the maintenance agreement, and the capital exposure over the next five to ten years. Elevators are routinely one of the largest deferred capital items in a building and one of the least examined during diligence. A single traction modernization can run into seven figures, and it does not appear anywhere in a standard property condition report at the level of detail a buyer needs.
Why does this get missed?
Because the elevator section of a general property condition assessment is usually a paragraph.
A PCA covering roof, envelope, mechanical, electrical, plumbing, structural and site will typically note the elevator count, the approximate age, whether the units were running on the day of the visit, and a generic remaining useful life estimate pulled from a table. That is not diligence. It tells a buyer nothing about controller obsolescence, deferred maintenance, open code items, testing status, or whether the maintenance agreement the building has been paying for was actually being performed.
The gap between “the elevators were operational during our site visit” and “here is your five year elevator capital exposure” is frequently the difference between a deal that works and one that does not.
What should elevator due diligence cover?
• Unit by unit condition assessment. Controller, drive, machine, ropes, door operators, fixtures, safeties, hoistway equipment. Documented, not estimated from a nameplate.
• Remaining useful life per unit, with the basis stated.
• Parts obsolescence exposure. Whether components for the installed control system are still manufactured, and what the sourcing situation actually looks like.
• Code compliance and testing status. Category 1, 3 and 5 test records, open violations, outstanding AHJ findings, and whether the maintenance control program required by ASME A17.1/CSA B44 Section 8.6 exists and is current.
• Maintenance agreement review. Term, renewal and cancellation provisions, actual scope versus scope charged, pricing against market, transferability at closing, and any evergreen clause that survives the sale.
• Maintenance performance history. Callbacks, downtime and repair history. This is where you learn whether the building received what it paid for.
• Five to ten year capital forecast, phased and priced at a planning level.
• Traffic adequacy if the buyer intends to change the building’s use, tenancy or density.
What are the specific risks for portfolio buyers?
Portfolio acquisitions concentrate every one of these problems.
Inherited agreements at above market pricing. Maintenance agreements frequently contain automatic renewal provisions and long cancellation notice windows. A buyer can close on twenty buildings and find themselves locked into pricing and scope they had no part in negotiating. TEC typically reduces maintenance agreement pricing by 10 to 40 percent while increasing the scope of work, but that leverage is far greater when it is applied before closing than after.
Systemic deferred maintenance. If a seller was managing to a sale, elevator maintenance is a common place to under invest, because the deficiency is invisible without opening the equipment. It shows up on the buyer’s books eighteen months later.
Regulatory exposure across jurisdictions. A portfolio spanning multiple states spans multiple adopted code editions and multiple AHJs. The current edition is ASME A17.1-2025/CSA B44:25, but the edition enforced in any given building is whichever one that jurisdiction has adopted, and they differ.
Concurrent modernization demand. Buildings of similar vintage acquired together will need modernization at roughly the same time. A capital plan that sequences that work is worth building before the units start failing.
Who should perform it?
Not a party with an interest in the outcome. The elevator company currently servicing the building has a relationship with the seller and a maintenance agreement it would like to retain. A contractor who might bid the resulting modernization has an interest in the scope. Neither is positioned to give a buyer a neutral number.
TEC performs elevator due diligence for buyers and sellers, audits over 2,000 elevators a year, and does not sell, install, service or supply parts.
Frequently asked questions
How long does elevator due diligence take?
Field work is usually a matter of days depending on unit count and portfolio geography. The document review, particularly the maintenance agreement and testing records, often takes longer than the site visits. It fits inside a normal diligence period when it is started early enough.
Can this be done on a portfolio, or only building by building?
Portfolio wide is the normal engagement, and it is where the findings are most useful, because it produces one sequenced capital plan rather than twenty disconnected reports.
We are selling, not buying. Is there a reason to do this?
Yes. Knowing your elevator exposure before a buyer’s consultant finds it lets you address it, price it in, or prepare a response. Sellers who get surprised during diligence lose the negotiation