If you are an owner in a strata title or manage strata buildings that have elevators in it, here are our top 5 tips to help you!

1. Understand your contract
2. Understand your obligations
3. Understand what you are paying for
4. Manage risk of obsolescence and end-of-life hardware
5. Establishing a Capital Works Fund (Sinking Fund) for renewal and modernisation

According to the Australian Bureau of Statistics (ABS) 2021 Census, 16% of Australians live in apartments¹ and an estimated 67% of Australians will move to land scarce capital cities by 2032.² The shift will see more and more multi-storey apartment developments year after year and these buildings will heavily rely on elevators.

As we urbanise our cities, elevators will become more and more a part of our everyday lives. They are the highways of our buildings and not just where we shop and work, but more and more where we live.

When you hear ‘Elevator’, the first thing that would pop into your head will be a negative experience of when elevators didn’t work, when you had to wait a long time for an elevator or a time when you were in the elevator, and it stopped, and you couldn’t get out – correct?!

No one actively thinks about elevators in their daily life, unless you live or work in the elevator industry or you are a building manager. However, when an elevator is not working, all of us depending on the building’s ‘highway’ cannot seem to ignore it, it can literally ruin our entire day, week or lives.

As elevators are not front of mind for most of us, the approach to managing elevators can often be reactive. Reactive equals frustration, inconvenience and of course it is more expensive.

Our top 5 tips below aim to provide some useful tools to help make the management of elevators more proactive and reduce frustration, inconvenience and the costs associated with the management of elevators. If you are an Owner, Building Manager or a Strata Manager, we think you will find this most useful.

1. Understanding your contract

Understanding your maintenance contract is essential to ensuring you know what is covered and what is excluded and what you can expect from your service provider.

There are three main types of contracts offered by elevator maintenance provides in Australia:

• Comprehensive Contract
  1. This level of maintenance contract would include the Planned Preventative Maintenance (PPM) schedule;
  2. Service calls for scenarios such as elevator has stopped, elevator is operating erratically or persons trapped in the lift;
  3. Adjustments to the elevator operation, repairs to operating components such as door locks, door rollers, bearings, ropes, safety switches and electronics components such as Printed Circuit Boards (PCBs) and relays are also typically included with a Comprehensive contract;
  4. Obsolete components, motors, motor fusion are sometimes not included depending on the specific clauses in your contract and these would often we charged on an ad-hoc basis and costs can put a lot of pressure on the owners, especially when capital works funds have not budgeted for these situations.

• Semi-Comprehensive Contract
  1. This level of maintenance contract would include the Planned Preventative Maintenance (PPM) schedule;
  2. Service calls for scenarios such as elevator has stopped, elevator is operating erratically or persons trapped in the lift;
  3. Adjustments to the elevator operation, minor repairs to operating components such as door locks, door rollers and safety switches are also often included;
  4. Parts replacement, which may include motors, ropes, electronics components such as Printed Circuit Boards (PCBs) and relays are often not included within the contract fees and are typically at an additional fee;
  5. Obsolete components are typically not included would be charged on an ad-hoc basis and depending on the brand, age and condition these costs may be extremely high;

• Non-Comprehensive or “Do and Charge” Contract
  1. This level of maintenance contract would include only the Planned Preventative Maintenance (PPM) schedule;
  2. Service calls for scenarios such as elevator has stopped, elevator is operating erratically or persons trapped in the lift would be charged on an ad-hoc basis;
  3. Repairs and parts replacement to the elevator operation would all incur additional fees;

For all contract types, exclusions for events that are not under the control of the elevator maintenance provider would incur additional charges. These would include, but not be limited to, water ingress, moisture created by air conditioning units in machine rooms as well as ‘vandalism’ and fire damage. For these incidents it is important to have the right insurance policy in place.

Other important items to look out for in the contract would include, again not limited to:

• Response times;
• Coverage times (eg. business hours callouts and after-hours callouts);
• Downtime commitments for repairs;
• Standard hourly rates for ad-hoc works;
• Annual fee adjustment mechanism (eg. fixed annual increase or an index such as Consumer Price Index – CPI ); and
• Ad-hoc callout fees and labour fees.

If you are unsure of what is or is not included in your maintenance contract, Elevating Studio can assist you with a Contract Review – Click here to request a consultation.

2. Understand your obligations

In most Australian states and territories, elevators are considered an item of plant and require registration with the relevant governing authorities. A summary of these regulators is summarised below in Table 1.

Table 1.

Plant registration is much like your car registration, if it is not registered then it should not be used. In order to register your elevator, you must provide evidence that the elevator has been maintained by competent persons or organisations. You must also provide relevant statements or certificates to confirm that the elevator is safe to operate and meets the requirements of AS1735 as it relates to maintenance of elevators.

Some of these requirements include, but are not limited to:

• Regular inspections;
• Access and availability of maintenance records;
• Accessibility requirements; and
• Emergency communications availability and operation.

In some states and territories there are additional requirements for an Annual Fire Safety Statement (AFSS) signed off by a duly authorised Fire Safety Practitioner. These sign-offs are typically issued by Local Council and are required annually.

Failure to register your elevator with the relevant governing authority in your state or territory may have consequences for the owners. Some of these sanctions, penalties may include, but are not limited to:

• Monetary fines;
• Improvement notices;
• Suspension of plant; and
• Legal action.

In addition to the sanctions that may be imposed by the regulator, there may also be reputation damage impacting the strata manager and the owners which can have an impact on valuations.

In the unfortunate event that someone is injured whilst using an item of unregistered plant, general and public liability insurances may not cover the body corporate and expose owners to very significant damages claims.

If you are unsure about the status of your elevator registration or need assistance with understanding your obligations, Elevating Studio can help you – Click here to request a consultation.

3. Understanding what you are paying for

Depending on the type of contract you have in place with your elevator service provider, the mix between the regular monthly invoicing and ad-hoc invoicing can vary quite significantly.

Ensuring that you understand what you are paying, when you are paying and what price escalation clauses exist in your contract will help you plan your operational budgets more accurately and eliminate cost overruns.

In some cases the ad-hoc costs can be many times the monthly fees so make sure you clearly understand the rates, hours, mark-ups and service times (normal hours and after hours) as rates can vary significantly.

Some good practices to ensure you understand what you are paying for include but are not limited to:

• Review invoice details and compare with inclusions of the contract;
• Require that only authorised persons can request service callouts;
• Mandate that service providers produce evidence for any ad-hoc charges (eg. photos of damage etc.);
• Review ad-hoc charges with building sign-in or CCTV to ensure stated times on the invoice are consistent with other data sources; and
• Check regular maintenance invoices to ensure the contractual annual fee adjustments are occurring at the right time and at the right rate.

If you have questions about your invoicing, reach out to your service provider to request a review and supporting documentation. If you need assistance with this Elevating Studio can assist – Click here to request a consultation.

4. Manage risk of obsolete components and end-of-life hardware

Similar to other items of plant in a building, elevators have a useful operating life which is generally between 20-25 years. Of course the usage, level of maintenance, environment and standard of the original elevator are all factors that impact this life-cycle.

As elevators age, there are several important items that owners and managers of strata buildings need to be aware of and need to plan for. These can include, but are not limited to:

• Availability of spare parts;
• Obsolescence of components, especially electrical, visual displays, computers and motor electronic drive units;
• Condition and repair requirements that may not be included within the level of contract cover (eg. exclusion of ropes and bearings);
• Upgraded component; and
• Renewal and modernisation planning (aka life-cycle planning).

Failure to be aware and to plan for this circumstance may lead to:

• Extended downtime of your elevator;
• Unplanned depletion of capital works funds;
• Special levies being imposed on owners; and
• Loss of reputation for strata manager for failure to adequately advise the body corporate of such risks.

If you need help understanding and managing your risk of obsolescence and end-of-life hardware for the elevators in your building(s), Elevating Studio can assist you – Click here to request a consultation.

5. Establishing a Capital Works Fund (Sinking Fund) for renewal and modernisation

In Australia, all states and territories mandate that the body corporate establishes a capital works fund for future projects. This mandatory requirement was first established in 2009 to protect present and future owners against unplanned special levies for upgrades and repairs to buildings.

As the ‘highway’ of your building, planning for the upgrade and modernisation of your elevator is essential. Ensuring that you have the right level of available funds when it comes to time renew your elevator has several benefits:

• Avoid unplanned special levies;
• Enables the proactive planning of renewal and reduces risk of equipment being stopped for lengthy periods;
• Enables the owner’s corporation to develop and review requirements without the pressure of having the elevator shut down;
• Allows more time for a thorough tendering process;
• Enables owners and tenants to plan their own lives around the elevator modernisation (eg. seek alternative short-term living arrangements during elevator upgrades)

Unless you are a professional developer or work in the elevator industry, it can be difficult to understand how to plan and what to budget for when it comes to the development of a capital works fund for elevator modernisation. With the changes in technology, the solutions in the market today can vary significantly to the original elevator – so do your homework.

When preparing building capital plan, often estimators who do not specialise in elevators provide a ‘guestimate’. A specialist Lift Consultant can provide an accurate capital plan and recommend short, medium and long term options.

If you need help building a capital works fund plan for the elevators in your building(s), Elevating Studio can assist you – Click here to request a consultation.

The elevators are the highway of your building and there are a few important things you need to be aware of. Our top 5 tips highlighted below will help you to better understand, manage and plan for your elevators and both add value to your building and control your spending.

1. Understand your contract
2. Understand your obligations
3. Understand what you are paying for
4. Manage risk of obsolescence and end-of-life hardware
5. Establishing a Capital Works Fund (Sinking fund) for Renewal and Modernisation