Elevator Service Contracts Essentials

April 1, 2014

Ten Things Condo Boards Must Know About Elevator Service ContractsElevator Service Contracts are always a topic of discussion in condominium associations. Your community’s elevators are one of its biggest and most expensive assets. Your community’s residents and guests ride in them every day and they expect that the elevators are being well maintained. Although most board members are unfamiliar with elevator contracts and the maintenance services being provided to their elevators, the board is still ultimately responsible for ensuring that the amenities are being maintained. Here are ten things to look for when negotiating new elevator service agreements.

 

  1. Avoid terms like "periodic or routine”: When it comes to the terms and conditions of the maintenance schedule in your Elevator Service Contract you want to be sure that you avoid terms like “periodic and routine”. If the elevator equipment needs monthly maintenance, the elevator maintenance contract should state the exact frequency of when service is to be performed.
  2. Failure to Perform Clause: Make sure that the Elevator Service Contract includes language stating the service provider must provide a credit to the association if service is not performed as outlined in the contract or if they fail to perform any services.
  3. What’s Covered In Our Contract?: In order to avoid asking in the future, you want to make sure that the contract clearly defines what parts and services are covered and what is not covered by the contract.
  4. Contract Renewal Dates: Most maintenance contracts include automatic renewal terms. A good elevator maintenance contract usually provides for a 90 day cancellation clause. This way the contractors know they must continue to prove themselves as the best maintenance providers or they will lose your account.
  5. Require Licensed Personnel: Include a provision in your contract that all personnel performing maintenance and repairs to your elevators must show proof of valid licensing. This will provide assurance that the personnel have the experience and training required for working on your equipment.
  6. Require Work Orders and Service Tickets: Each time service is performed, get a copy of the work order and/or service ticket. You may also want to require the contractor to maintain a log of the hours spent on the service, including their times in and out of the property. These should all be maintained with the associations’ maintenance records.
  7. Independent Inspector: If you are in a state or jurisdiction that allows or requires private elevator inspectors, hire your own inspector. An independent inspector will inspect the work of the elevator contractor as well as issues which are the responsibility of the building owner.
  8. Know the word "Indemnification": This is a term used to limit or direct liability to responsible parties. Standard contractors' agreements include this language and are very important. It is highly recommended that all Indemnification clauses be negotiated and reviewed by legal counsel. Some building owners do not thoroughly read or understand this section of the agreements and sign them anyway. This practice makes the building owner assume full responsibility for all work performed on their equipment.
  9. Prepare for an accident: Hopefully accidents won’t happen, but before one occurs, a plan should be put into place. Never allow the elevator company or maintenance staff to assist with removing entrapped persons, only the Fire Department or Police Department should do so.
  10. Use Elevator Consultants: Secure the services of an elevator consultant to help you understand the code requirements and prepare a Scope of Work. Any "code required" modifications or repairs should always be reviewed by a consultant. By seeking the advice of an elevator consultant, building owners can be assured that the work they are contracting for is done properly and that they are not over paying for unneeded services or upgrades.

Marc Rodriguez, LCAM, CMCA
Associa, Director of Management Services

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