Throughout history, contracts have been a part of how things got done in the world. Whether in politics or business, people entered into contracts good and bad. Originally contracts were designed to protect both parties and usually provided a set of agreements that both agreed to obey. Today is no exception, but many businesses, particularly the elevator maintenance industry, have lost sight of the customer in their attempt to protect themselves from every possible situation.
So in the middle of all the legalese in the various elevator contracts today, here are a few things to look for in an elevator contract.
- Number of Visits per Year: Be sure to check how many maintenance visits per month or year that you will be receiving for the specified amount and require the service provider to include this in writing in the contract. Having been in the industry for 17+ years, I have seen companies reduce their annual visits from 12 to 4 or even less, while continuing to charge the customer the same amount. They are able to do this because the contracts usually read “periodic examinations” or “per industry standards” allowing them to set the number of visits without your knowledge.
- Annual Increases: For contracts over one year, annual increases are the norm; however be sure to find out specifically how much they are going to be. Many contracts specify a percentage rate such as 6%. This might not seem like much, but when added to a long-term contract it can really add up.
- Automatic renewals: Some states have laws regarding this practice. Most elevator contracts put the burden on the customer to notify the elevator company in writing of their intent to cancel the contract 90- 120 days out from the renewal date. This catches many people by surprise and locks them into another costly long-term contract with annual increases and no options. Here in Florida our legislature passed legislation (2010 Florida House Bill 751) to the effect that the burden of written notification of the automatic renewal rests on the company not the customer. This only affects contracts written after the legislation passed in July of 2010. Check your state and local laws concerning this issue.
- Term Length: Long-term contracts might look attractive because of lower initial monthly costs, but buyer beware. These contracts make up for these low costs through high annual increases or extra billing practices. I would not recommend any contract over a 2 year term. This gives you, the customer, more control over your elevator service costs. Longer contracts give the elevator company more control over you and your elevator.
- Billing Charges: Know your billing rates and how they work before you sign. You do not want to be surprised when the first overtime bill of $1100 for a 2 hour call back arrives on your desk. Billing structures vary on contracts, so be sure that you know what you will be charged and get it in writing.
These are some of the major things to look for when dealing with elevator contracts, or any contract for that matter. Elevator contracts can be very long and tedious, but be sure to read them thoroughly. If you have any questions, ask the sales representative. If he cannot explain it to you so that you understand or does not want to do so, beware. Make corrections or mark out things you do not like and have the sales representative initial the changes with you. Never sign anything that you do not understand.
I hope this helps you make wise decisions when the time comes to renew or sign a new elevator contract. As the owner of First Coast Elevator, my goal is to keep building managers and elevator owners informed about the ways that they can take control of their elevator maintenance program, reduce their overall elevator maintenance costs, and choose wisely when dealing with elevator maintenance contracts. If you have any questions about how we can help, please contact us today!