Your elevator contractor just sent over a renewal. The document is 12 pages of terminology you've never encountered. "Examination agreement." "Annual escalation." "Anniversary cancellation." "Liquidated damages."
Here's the problem: the same concept has five different names. "Exam & Lube," "Oil and Grease," "Limited Coverage," and "Maintenance Only" all mean the same thing. Contract language is designed to confuse, not clarify. This glossary cuts through it.
Contract Type Terms
The foundation of every elevator contract is whether parts are covered.
| Term | Also Called | What It Means | What It Costs |
|---|---|---|---|
| Full Maintenance (FM) | Full Service, Comprehensive | Parts and labor included. Repairs are the contractor's problem. | ~2x Examination |
| Examination (Exam) | Oil & Grease, Limited, Maintenance Only, Exam & Lube | Labor only. Parts billed separately. | Baseline |
The core distinction: FM works like insurance. Something breaks, contractor pays. Exam works like pay-per-repair. Something breaks, you pay. A deep dive on FM vs O&G covers the full financial implications.
FM contracts typically run $3,500 to $9,000 per unit annually. Exam contracts run $2,000 to $4,000. The savings on exam evaporate when parts fail, and parts always fail on aging equipment.
Coverage Terms
Even "Full Maintenance" contracts exclude certain items. Know what these terms mean when you see them.
| Term | What It Means |
|---|---|
| Covered | Included in your monthly payment. No additional charge. |
| Excluded | Not included. You pay parts plus labor when needed. |
| Major Component | Big-ticket items: controller ($8K-$12K), door operator ($20K-$23K), machine ($60K-$80K) |
| Minor Repair | Small adjustments and parts. Usually covered on FM, billable on Exam. |
| Routine Maintenance | Scheduled items: lubrication, adjustments, inspections. Covered on both contract types. |
| Vandalism/Abuse | Always excluded. No exceptions. If someone kicked in your hall button, you're paying. |
The phrase "parts included" is meaningless without a defined parts list. If your contract says "routine parts included" without specifying what qualifies, the contractor defines "routine" at billing time.
Hidden fees in maintenance contracts explains the most common exclusion traps.
Time and Response Terms
Response time guarantees sound straightforward until you read the fine print.
| Term | What It Means |
|---|---|
| Regular Time (RT) | Weekdays 8 AM to 5 PM. Service during these hours is typically included. |
| Overtime (OT) | Nights, weekends, holidays. Often billable even on FM contracts. |
| Entrapment Response | Passenger trapped in cab. Realistic: 30 min RT, 1 hour OT. |
| Routine Response | Standard service call. Realistic: 3-4 hours. |
| Guaranteed Response | Contractual obligation with defined penalties. Contractors charge a premium for this. |
"24-hour response" means different things for different situations. Entrapment is a safety issue. A noisy door is not. Clarify which triggers which.
Cost Escalation Terms
These terms determine whether your contract gets more expensive every year.
| Term | What It Means | Watch Out For |
|---|---|---|
| Annual Escalation | Percentage increase each year. | 3% annual compounds to 49% over 15 years. |
| CPI-Linked | Tied to Consumer Price Index inflation. | CPI varies. Some years 2%, some years 8%. |
| Rate Cap | Maximum annual increase allowed. | A 5% cap is meaningless if escalation is 3%. |
| Evergreen Clause | Auto-renews unless cancelled in narrow window. | Miss the 90-day notice? Locked in another term. |
Evergreen clause traps explains how these automatic renewals catch property managers off guard.
A "reasonable" 3% escalation looks harmless in year one. By year five, you're paying 16% more than you started. By year fifteen, 56% more. The math compounds faster than most property managers realize.
Termination Terms
When you want out, the contract fights back. Know these terms.
| Term | What It Means |
|---|---|
| Early Termination Penalty | Fee to exit before contract end. Industry standard: 50% of remaining contract value. |
| Contract Void | Contract ends with no penalty. Triggered by equipment modernization. |
| Anniversary Cancellation | You can only cancel on specific dates, usually contract anniversaries. |
| 30-Day Notice | Rare. The most flexible cancellation clause. Get it if you can. |
| Liquidated Damages | Pre-agreed penalty amount for breach. Can exceed early termination cost. |
Here's a useful fact most property managers don't know: when equipment is modernized (controller replaced), the existing maintenance contract is voided, not terminated early. Modernization kills the contract without penalty.
Terms That Increase Price
Consultants and procurement departments sometimes add clauses without understanding the cost implications.
| Term | What It Adds |
|---|---|
| Minimum Maintenance Hours | Contractor must spend X hours per month onsite. Drives up price. |
| Performance Bond | Insurance the contractor will finish work. Adds 1-3% to contract value. |
| Strict Response Guarantees | Penalties for late response. Contractors build this cost into premiums. |
| Liquidated Damages | Pre-set penalties. Higher than typical early termination fees. |
Every clause that protects you costs money. That's fine if you know you're paying for it. The mistake is adding clauses without understanding the premium increase.
What to Do Next
Contract terminology is designed to keep you at a disadvantage. The contractor wrote the document. They know what every clause means. Most property managers sign without understanding half of it.
Don't be most property managers.
Upload your contract to our Contract Scanner. In 60 seconds, it identifies clause types, flags red-flag language, and shows you exactly what you're agreeing to. No more surprises when the parts bill arrives.
Answer 15 questions and get an instant risk score for your elevator service agreement.