In today’s challenging economic environment, buildings with elevators are discovering an uncomfortable truth that their “comprehensive” elevator service contracts may not be as comprehensive or protective as they thought. With over three decades of experience in elevator consulting, I’ve witnessed a growing trend of unexpected costs and service limitations that are blindsiding buildings across all building types—from single-elevator medical offices to multi-tower commercial complexes. Understanding these hidden costs is essential to safeguarding your building’s budget and ensuring smooth elevator operations.
The False Security of “Full Service” Contracts
Many buildings believe their monthly elevator service contract payments provide complete coverage for their vertical transportation needs. However, recent industry trends reveal a disturbing pattern of elevator service providers finding ways to charge additional fees despite existing contract obligations. Whether you manage a hospital, office building, or condo association, it’s crucial to recognize these hidden pitfalls.
Case Study 1: The New Elevator Paradox
A medical office building with a single elevator, just two years old, pays $1,200 monthly for what they believed was comprehensive coverage. Despite having a contract with the original equipment manufacturer (OEM), they recently faced a $7,000 charge for an “adjustment” troubleshooting visit. This situation raises serious questions about what “full coverage” actually means, even with new, proprietary equipment.
- Hidden Cost Impact
- Unexpected Diagnostic Fees: Many contracts use vague language around what’s included, allowing providers to charge for basic adjustments. A newer elevator shouldn’t require major adjustments, especially from the OEM who designed it.
- Potential Business Disruption: Downtime during these unexpected service visits can inconvenience users and disrupt daily operations, leading to dissatisfaction.
- Budget Overruns: Surprise charges, like a $7,000 adjustment, can throw off tight budgets, especially in economic climates where every dollar counts.
Case Study 2: The Parts Availability Dilemma
A commercial office building with 14 elevators, paying $8,600 monthly on a five-year contract, faces a critical decision. Their service provider claims parts for three malfunctioning elevators components have a 3–6-month lead time unless they agree to a $6,000 per elevator upgrade. This “expedited” solution raises questions about artificial scarcity and forced costly repair.
- Hidden Cost Impact
- Forced Upgrade Expenses: This tactic pressures building owners into spending on upgrades that may not be immediately necessary. It often turns out that these parts suddenly become available once an agreement to pay more is made.
- Extended Downtime Costs: A 3–6-month delay affects tenant satisfaction and can lead to lost revenue as tenants question the reliability of the building’s services.
- Reputation Damage: Prolonged downtime can damage a building’s reputation, making it less attractive to tenants and potentially affecting occupancy rates.
Case Study 3: The End-of-Life Ultimatum
A property with four aging elevators, paying $4,000 monthly, suddenly faces a service provider’s refusal to continue regular maintenance when callbacks start. The provider’s solution? Downgrade to a basic “oil and grease” contract, effectively eliminating most protective coverage despite years of payments for full-service maintenance.
- Hidden Cost Impact:
- Increased Liability Exposure: Without proper maintenance, the of equipment failure and downtime increases, which could lead to several building issues.
- Higher Future Repair Costs: Downgrading service means smaller issues may go unaddressed, eventually turning into more significant problems that require expensive repairs.
- Accelerated Equipment Deterioration: Lack of thorough maintenance accelerates wear and tear, reducing the equipment’s lifespan and necessitating earlier replacement.
The Maintenance Myth
A common thread through all these scenarios is the absence of regular maintenance documentation in the machine rooms. Despite paying for “full service” contracts, these buildings lack evidence of consistent preventive maintenance. This gap between contracted services and actual delivery is creating a perfect storm of deferred maintenance and escalating costs.
Regular documentation is not only a best practice it’s often a code requirement. Yet, many elevator service providers fail to maintain proper records, leaving building owners in the dark. Platforms like the ElevatorApp™ provide a solution by tracking service records, callback data, and maintenance activities to ensure transparency.
Industry-Wide Impact
This issue affects every type of building with elevators, from hospitals to hotels to medical office buildings. Here’s how:
- Hospitals face potential disruptions to critical care access due to unplanned downtimes.
- Hotels risk guest dissatisfaction, refunds, and negative reviews due to delays or inconveniences.
- Condominiums must balance resident needs with tight budgets, making hidden costs especially burdensome.
- Office buildings can struggle with tenant retention when frequent elevator issues compromise daily operations.
Protecting Your Building and Budget
To avoid these hidden costs, consider these essential steps:
- Documentation Requirements:
- Demand detailed service reports for every visit.
- Maintain an independent log of all callbacks, entrapment, service, testing, inspection.
- Document all conversations about additional charges.
- Use the ElevatorApp™ to capture all the documents and information required.
- Contract Review:
- Have an elevator consultant review contract terms to ensure that inclusions and exclusions are clear.
- Understand all potential cost exposure points, such as exclusions for proprietary parts or specific types of repairs.
- Performance Monitoring:
- Track callback frequency and patterns to identify possible gaps in maintenance.
- Monitor response times and resolution rates to ensure timely service.
- Use the ElevatorApp™ for real-time monitoring and to hold service providers accountable.
Moving Forward: The Role of Independent Consultants
The elevator industry’s current trajectory suggests these issues will likely intensify as providers continue to leverage their knowledge advantage over building owners. Engaging an elevator consulting firm can be a game-changer. Consultants have elevator consulting services that can provide unbiased contract reviews, identify hidden inefficiencies, and ensure that elevator service providers deliver what they promise.
Overall
The hidden costs of elevator callbacks extend far beyond immediate charges. They impact building operations, tenant satisfaction, and long-term equipment reliability. Understanding these challenges is the first step toward protecting your building and budget from unexpected elevator expenses. Remember, your elevator service contract is only as good as its enforcement and documentation. Take control of your elevator maintenance program before you face a costly surprise.
FAQ:
What should I look for in an elevator service contract to avoid hidden costs?
When evaluating an elevator service contract, focus on understanding what’s included and what’s excluded in terms of maintenance, repairs, and parts. Look for terms that define the service levels and accountability It’s also crucial to verify if there are clauses for proprietary parts, as these can lead to unexpected charges. Consider consulting an elevator consultant to review the contract to ensure it aligns with your building’s specific needs.
How can I verify that my elevator service provider is performing all contracted services?
To ensure your service provider is meeting their obligations, ask for detailed service reports after every visit and keep a log of all maintenance and repairs. Regular audits of the service records can help you verify that maintenance tasks are being performed as scheduled. Tools like elevator monitoring software, ElevatorApp™, track maintenance activities, callbacks, and compliance with your contract, giving you real-time insights into the services being provided.
Why do some elevator companies charge extra for adjustments on new equipment?
Extra charges for adjustments on newer equipment often stem from ambiguous terms in service contracts. Even with new installations, providers might claim that certain diagnostics or troubleshooting are outside the scope of standard maintenance. This is especially common with proprietary equipment where only the manufacturer can service specific parts. Buildings should clarify these potential charges before signing a contract and consider negotiating for broader coverage to avoid unexpected costs.
What are the risks of choosing a basic “oil and grease” contract?
A basic “oil and grease” contract typically only covers minimal lubrication of parts and basic upkeep, without addressing in-depth preventive maintenance or potential repairs. This contract can be beneficial to some buildings however in older equipment it can lead to increased wear and tear and higher risk of equipment failure. Such contracts can save money in the short term but often result in more costly repairs and replacements down the line. It is best to discuss with an elevator consultant this type of contract to see if it is a fit for your building.
How can I avoid being pressured into expensive elevator upgrades?
Avoiding pressure to upgrade often comes down to understanding your elevator’s current condition and your service contract. Engage a professional elevator consultant who can provide an unbiased assessment of your elevator’s needs and help identify whether suggested upgrades are genuinely necessary. Additionally, ensure that your contract includes provisions for part availability and realistic timelines for repairs. This can prevent providers from creating a sense of urgency around upgrades that may not be needed immediately.