HVAC Contract: Why is it Important for HVAC Services?

HVAC service contracts or maintenance contracts are vital to the success of any good HVAC company. As per the research published by the U.S. Office of Energy Efficiency & Renewable Energy’s Better Buildings Neighborhood Program, the primary drivers of revenue for HVAC contractors are maintenance contracts. However, many people do not know what an HVAC Contract is and how it can benefit them. 

The average homeowner only buys 1.5 heating, ventilation, and cooling systems in their lifetime. This is why an HVAC contract can be beneficial for HVAC business owners. In addition, these contracts make sure the homeowner stays in touch with the company by sending a worker to their house every few months. 

Keep reading to know the role of HVAC contracts and understand their importance for business owners and homeowners.

What is an HVAC Service Contract?

An HVAC contract is a document that the client and the contractor sign. HVAC maintenance contracts lay out the terms and conditions of the agreed-upon HVAC Services. The agreement states what the contractor will do to the HVAC system and when the work will be done. The contract review is done and signed by both parties. 

This legal document is taken seriously by both parties, and one should understand how to manage maintenance contracts well. The service contract includes the installation, HVAC maintenance, and repair of an air conditioning or heating system in homes. It’s important to have an HVAC service contract for homeowners to keep their heating and cooling equipment running efficiently.

A service contract allows for the fixing or replacing of minor parts that might be damaged or need to be replaced. The agreement will pay for labor and conditions covered by the contract. A service contract on a furnace provides many benefits for both the customers and the service being rendered. 

Most contracts are for one year, but some are for two-year periods. A contract can give customers the peace of mind that repairs can be made in the case of an emergency and preventative maintenance. Service call contracts also provide the company with a reliable schedule of priority service calls. This helps them schedule maintenance in a more efficient way. 

Key elements of an HVAC contract 

• Details of your company – Includes the HVAC business’s legal name, their addresses, and participation in the transaction. Additionally, it is essential to ensure the integration of HIPAA Compliant Billing software to maintain the privacy and security of sensitive information.
• Services: Defining the services you will be delivering, and the frequency of visits is essential. 
• Payment methods – The price of the service and the method by which the HVAC technician expects to be paid.
• Termination Clause – If either the service provider, contractor attorney, or the customer wishes to discontinue the contract. 
• Indemnification Clause – What happens in the event of a dispute like happened in real estate, and who is responsible for compensating the victorious party for their losses?
• Modifications – The process to be followed in case any service modifications are needed.
• Extra Benefits – Priority scheduling, rebates on the work, and speedy response times are all examples of service contract add-ons.
• Signatures – Signature lines for both parties to sign are the final step in the contracting process.

Advantages and Disadvantages of Using HVAC Contract

Advantages

There are various advantages to having HVAC service contracts that benefit both parties:- 

• Mutual understanding of what services will be provided and what will be the price for HVAC services
• An instruction manual and contract in the event of a disagreement
• Clients with preventive maintenance contracts receive first-class treatment from the company’s technicians.
• The steady flow of repair and tune-up work provided by maintenance agreements provides a more stable source of income for business owners.
• With a maintenance contract, the price of components and labor costs for frequent repairs are both reduced, which is beneficial for owners.
• HVAC workers stay active even on off-seasons.

Disadvantages 

With an HVAC service contract, there aren’t many substantial drawbacks. The following are some of the more notable ones: –

• The price of creating legally binding HVAC service agreements. Although homeowners may not use these services, they must still pay the annual charges.
• Making it difficult for a side to terminate the agreement if their circumstances change.
• The costs charged will differ based on the services provided and the companies providing those services.

Why is it Important to have an HVAC Contract

1. Better revenue

HVAC service contracts boost the profitability of building owners the most. HVAC contractors may maintain a stable revenue stream by having a steady repair workflow, and dedicated service contracts provide that continuous flow.

2. Maintain customer relationships

When starting a new contracting business, these agreements play a significant role in maintaining good customer relationships. An HVAC service contract gives your staff additional opportunities to meet with consumers. It makes it easier for them to maintain regular face-to-face contact with a loyal customer base. 

3. Save money and resources

Once or twice a year, tune-ups will keep HVAC units running at peak efficiency. In many circumstances, the savings in a homeowner’s monthly energy bill will more than compensate for your scheduled maintenance plan. Having a maintenance contract allows you to save money on labor and parts, as well as reduce the number of breakdowns and energy usage, makes all worth it.

4. Priority Service

If HVAC tools, equipment parts, or supplies are temporarily unavailable, HVAC building owners who sign an HVAC agreement will be among the first to get them as soon as they become available again. 

5. Better sales 

It is much easier for professionals working properly under an HVAC service agreement to suggest improvements to a home’s health, comfort, and safety. With a service agreement, the workers already establish the trust needed to improve their sales. 

How Much Does it Cost to Have an HVAC Contract? 

The first step to understanding how to get maintenance contracts and decide the HVAC service contract price is determining what is wrong with a system. Do your customers need a new air conditioner? Are the ducts or gas lines clogged? Once you have figured out the problem, you can contact an HVAC company or attorneys to get an estimate on how much it costs to fix it. 

The HVAC services’ charges will vary depending on the type of HVAC device one has, the time of year, and the age of the system. If they have a heat pump or air conditioner, they must undergo filter replacements every 3 months. Newer air conditioners and heat pumps don’t amount to as much to run as older ones. The average cost of HVAC installation is $4000.

Heating and cooling service contracts often range between $100 to $500 per year but generally don’t include parts.  When looking for an HVAC business to fix your heating and air conditioning systems, it’s important to ensure you’re hiring the best HVAC technicians possible. 

Although the price is going to be a factor, you don’t want to skimp on your repairs by going with an HVAC technician that isn’t giving you the best services and products out there.

Here are the answers to some commonly asked questions:

Conclusion

Having a well-written business contract can help both parties involved in it. It’s important to have a professional HVAC contractor to ensure the customers have the most efficient HVAC equipment for their homes or business. Additionally, HVAC business owners also get the benefit of a frequent flow of work and profits that keep the companies running for a long time.

Making and implementing HVAC service contracts can be a complex process. You can look at an HVAC service agreement template, HVAC maintenance contract template, or benefit from automated software. FieldCamp’s automated and integrated HVAC scheduling and dispatching software allows your business to handle every aspect of work, from scheduling and technician tracking to billing and bookkeeping. 

HVAC scheduling software also makes business contracts easier to understand, easier to track, and less prone to error than manual entry. You can claim a free 7-day trial to understand the difference a well-built software can make to your business and its op