Property Management

How to Review Service Agreements in Commercial Property Maintenance Management

In commercial property management and as part of any property handover it is essential that you check out the supply agreements that apply to the maintenance undertaken in the property.  There will be issues to understand including services offered, costs, and frequency.

Talk to the building contractors as part of the property handover, and check out the agreements currently in place, and services they offer today in servicing the building and its operational functions.  That review will offer you some valuable insights into property function and operation.

Given that these contractors have been working with the building and its plant and equipment for some time, they can quite likely offer you relevant and real ideas relating to costs, strategies, and savings.

Service Agreement Checklist

Here is a checklist of some of the bigger concepts to review in any property handover.  The list can be used when working with maintenance contractors and understanding the supply agreements provided with the typical commercial investment property today:

  1. Who are they? – Understand who you are dealing with when it comes to each contractor in the building and preferred or provided trade services. Ask about their operational history relating to other buildings that they have been working on locally.
  2. What experience do they have? – With some maintenance trades today, the levels of experience required will be significant. Whilst there are always the manual trades to assess such as plumbing, gardening, and electrical, there are other specialized trades associated with the performance of the building air conditioning, the security system, fire prevention systems, and lift maintenance.  The qualifications and experience of every contractor should be checked and compared to the requirements of the building, the existing building codes, and other specialized businesses locally.  Make sure that you are getting the right people for the job given the requirements of the plant and equipment within the property.
  3. Frequency of service – How often do they attend the building and what tasks do they undertake? Ask them for a schedule of services and frequencies that apply to the specific components of plant and equipment serviced.  Make sure that the services provided satisfy the demands of the relevant building codes and safety codes.  In any complex building, it is wise to get an engineering consultant to assess the maintenance strategies and frequency of service.  That engineer could assess the maintenance contracts on an annual basis as part of an operational cost review at budget time.
  4. Costs of service – There will be existing contractual requirements when it comes to preventative maintenance and ongoing service. Look at the historical costs relevant to every contractor.  Ask to see a history of maintenance costs over the last two years so that you can see the patterns when it comes to maintenance works and activities.  Identify any items of a capital nature that were addressed or undertaken during that time.  Extract the capital items from the maintenance contracts and processes, and then undertake an assessment of maintenance activity, servicing, and maintenance strategy.  You can soon see the level of budgetary cost that you should apply to ongoing maintenance in the building within each trade and category of property operation.
  5. Preventative services verses breakdown costs – There are differences that apply to preventative maintenance verses the costs of breakdown response. There will also be costs associated with the responses during business hours, and after hours.  Check the costs for each contractor so that you can estimate operational expenditure and maintenance frequency.
  6. Seek recommendations – Most specialized maintenance contractors will help you with recommendations and establishing some ideas relating to savings and operational strategies. Ask the right questions and seek the recommendations that may help your building perform better both operationally and financially.


So there are plenty of things that can be done here when it comes to checking and reviewing the service agreements applicable to commercial investment property maintenance.  Create your own list relevant to your location and the property type.



Get Free Agent Resources Here....

* indicates required
Email Format
real estate team meeting

Do You Like Commercial Real Estate?

We like Commercial Real Estate and hope you do too!  Join us here for free resources and updates for agents & brokers worldwide.

You have Successfully Subscribed!