Updated on February 8th, 2023
An HVAC service contract is an agreement that creates an independent contractor relationship between an HVAC service provider and their client. The contract covers what services will be provided and the frequency of scheduled maintenance visits. The cost of maintenance and repairs will depend on a number of factors such as size and condition of equipment, regularity of visits, etc.). Still, all contracts will specify the cost of each service and any additional expenses.
Other important terms include the length of the contract, how and when payment will be made, retainer fees (if applicable), inspection of services, and the status of the provider as an independent contractor.
Benefits of a Service Contract
Implementing HVAC (Heating, Ventilation, and Air Conditioning) service contracts allows service providers to retain long-term clients, which creates more cash flow and, in turn, steady business growth. Since some of the work performed by HVAC specialists is seasonal, having contracts in place ensures that some servicing will be taking place even during the low season.
A service contract also helps demonstrate a provider’s reliability, which can present opportunities to sell additional services, add-ons, and other upgrades.
HVAC service contracts are a practical way to keep heating and cooling systems running smoothly. Scheduling maintenance only when it feels necessary could give rise to higher repair costs. Having an agreement in place with a trusted HVAC specialist means the system will be checked on a regular basis, leading to fewer repairs, extended equipment life, and the avoidance of potential safety hazards.
What Services are Included
HVAC service providers can bundle different maintenance services into a contract that tailors to the needs of each client. The client will decide how often they wish to receive scheduled maintenance based on the type, age, and condition of the equipment and the size of their entire system. The following services are typically incorporated into an HVAC service contract:
- Tune-ups such as checking for leaks, adjusting pressure and temperatures, cleaning filters and ducts, and adding necessary fluids.
- Purchasing and installing replacement parts and supplies.
- Pricing and installing new systems.
- Priority assistance (typically at a premium).
- Emergency service (usually an add-on at extra cost).
While there are many ways to bundle HVAC services, a contract will generally fall into one of these three categories:
- Preventative Maintenance: This is a cost-effective option that includes regular maintenance services, such as inspecting, testing, and cleaning equipment. Small replacement parts may be included, but large replacement parts and repair labor are not.
- Full Labor: These contracts cover all preventative maintenance and also include labor required for repairs and replacement of parts. However, the cost of the parts is still the responsibility of the customer.
- Full Coverage: Full coverage contracts come with all maintenance, labor and repairs, replacement parts, and emergency services.