Service Contracts for HVAC: Red Flags & Terms to Watch For

Do you tend to feel uneasy about signing a contract? That’s natural when you’re making a commitment to spend money. It can be a bigger source of stress when you don’t understand exactly what you’re getting for your money. That’s often the case when homeowners and business owners purchase an HVAC service contract.

When you’re not an HVAC expert (or a lawyer), HVAC service contracts can sometimes be tricky to understand. What makes things worse is that so many service providers do a poor job of explaining HVAC maintenance contract terms and conditions. That’s also true for HVAC service contract pricing. Contracts often fail to spell out the details of what you’ll be paying for.

While we don’t believe most of these vendors are intentionally trying to deceive you, the fact is you are being deceived. Because you can’t tell what you’ll get and what you’ll pay for with their HVAC service contract.

Here at Arista, we’ve been serving the NYC area for 70 years, so we’ve seen a lot of service contracts. In our experience, they tend to be poorly written to protect customers. We’ve made transparency and good communication a priority, so in this article you’ll see what ours looks like and learn why.

Here’s some information to help you compare maintenance contracts, beginning with a copy of our own HVAC service contract.

What an HVAC service contract should look like

Click on the cover page to open Arista’s complete HVAC service contract document.

HVAC service contracts: 4 red flags to avoid

There are a few things can can tell you at a glance if you’re looking at a poor HVAC service contract.

A single-page HVAC service contract. For your protection and peace of mind, service contracts for HVAC should spell out what’s covered, what’s not covered, what you can expect from the vendor, and cost information. There’s no way to fit all that on one page.

Tiny type. We see lots of contracts with all the terms & conditions squeezed into one dense paragraph in 6 point type. This is a common practice when the vendor hopes you won’t read it.

Lots of legalese. If you’re not a lawyer, this type of language makes it hard to understand what you’re agreeing to. It’s meant to protect the vendor, not you.

A price that’s too good to be true. Smart buyers like you are out there comparing prices. And sometimes you’ll get one that seems like a great bargain, priced well below the others. Our advice: you’ll get what you pay for. And, it’s surprisingly easy to figure out if that’s true. Read our HVAC service contract pricing guide to learn more about how to evaluate and compare prices for different types of contracts.

12 terms you will find on a good HVAC service contract

Now you know what you DON’T want to see on service contracts for HVAC.

Here’s what you DO want to find:

1. A complete list of covered equipment items. If you have multiple systems, you want to know exactly which equipment is covered.
2. A list of tasks performed at each inspection. All preventative maintenance is not equal! Read this to learn what should be included: Spring AC Maintenance Checklist.
3. How often inspections will be done. Are you getting maintenance once per year? Twice? Quarterly? It depends on your needs and should be specified.
4. Hours during which inspections will be done. Especially for businesses, make sure the hours are convenient for you. And if not, how much extra will it cost for off-hours work.
5. What you’ll get after inspections. You should expect to receive a post-inspection report detailing the work done and any issues found.
6. Description of included parts and labor. For basic service contracts for HVAC, parts and labor for preventative maintenance are usually included. Contracts covering additional repairs may include just parts (with labor billed separately). You can also get an all-inclusive contract that covers all repair parts AND labor. Obviously this costs more! The point is, the contract should spell out exactly what’s included.
7. What’s not included. A basic HVAC service contract usually does not include repairs. Depending on your location, there may also be other charges like travel charges (especially in a market like NYC where travel is time consuming). Make sure you know what you will be paying.
8. How will you be charged for work outside the contract? Service contracts for HVAC should specify what you’ll be charged for repair work outside the contract. Usually that’s based on materials and an hourly rate.
9. Procedures and cost threshold for repair estimates. If you do need repairs, how does that work? The vendor might automatically do small repairs up to a specified cost to save you paying for another service call. If the cost is expected to be above that specified amount, they may provide you with an estimate for your approval before doing the work. A transparent HVAC service contract should explain this process.
10. How appointment scheduling works. Do you have to remember to call them to schedule appointments? Will you get reminders?
11. How your HVAC service contract is renewed. What happens when your contract is coming up on expiration? Will the vendor automatically renew? Do you have to contact them to renew?
12. Payment options. Are you expected to pay at every visit? Or can you get billed quarterly or annually? Commercial HVAC service contracts sometimes offer flexible payment options. Taking advantage of these can be convenient and can even save you money. If that information is not offered, be sure to ask.

We hope you have found this information helpful! If so, here’s a simple quiz that can help you evaluate your current HVAC service contract and find out if you should be getting more.