As a landlord, are you confused about your boiler aftercare options?
When you’re faced with the possibilities of maintenance contracts, service contracts and service plans, the waters can become a bit murky which is why many landlords come to me for clarification.
In the past, I’ve written a number of blogs on maintenance contracts, service plans and aftercare options – but which is best if you’re a landlord?
Below, I’m going to compare maintenance contracts vs service contracts so you can weigh up the pros and cons of both, and make the best decision for you.
Also sometimes known as ‘service plans’, most maintenance contracts are offered by larger companies such as Scottish Power, and are sometimes insurance-based.
A typical maintenance contract will cover annual checks and emergency repairs to boilers, energy efficient controls and thermostats, radiators, flues to meet gas regulations – everything you need to meet your legal obligations.
For this, you can expect to pay around £20 per month to cover call-outs. That translates to around £240 per year, but you’ll be covered in the event of anything going wrong – and especially if you have multiple properties, a maintenance contract is probably the way to go if you want ultimate peace of mind.
In fact, I’d go so far as to say that if you’re looking for cover 24 hours a day, 365 days a year, you can’t beat the type of cover you can get from the likes of Scottish Power and the big boys.
However, in most cases maintenance contracts are the more expensive option, and one disadvantage of having a contract with a national company is that they may increase the price you pay over time, as your boiler gets older.
After five or seven years, they may also request to cleanse or power-flush your system at an extra cost of £500 in order to be kept under contract.
On numerous occasions I’ve also come across landlords paying for extras they likely don’t even need such as electrical cover and drainage cover at a very high margin!
Finally, if your boiler is new, you may not need a maintenance contract after all. Read my blog post ‘Do Landlords Need a Maintenance Contract for a New Boiler?’ for more information.
If a maintenance contract seems like a pricey option, there IS an alternative. What I like to call ‘service contracts’ are offered by most good heating engineers, and they typically work out cheaper than maintenance contracts (around £7.50 per month or £100 per year).
These are particular good if your boiler is still under guarantee, as they cover your boiler’s annual servicing (CP12 certificate) and your boiler will still be covered by the guarantee for repairs or emergency call-outs.
You can also choose to pay slightly more (in the region of £130 per year) to also cover your existing pipework, radiators and controls – basically your entire system that isn’t already covered by your guarantee – in case you do run into problems.
But what if your boiler is no longer under guarantee? Glad you asked.
Heating engineers also offer ‘premium cover’ which ensures you’re covered for all of the above, plus emergency call-outs and repairs if your boiler breaks down or needs replacement parts. This premium service contract only costs around £14.99 per year – which is still cheaper than some maintenance contracts.
However, it’s worth noting that most small heating engineers will not be able to offer 24-hour call-outs, 365 days a year, unlike what you can expect from maintenance contracts from some of the larger companies.
Despite this, I have seen a few clients who wanted to deal with a smaller company, as it meant there was more of a personal touch. Some told me they were fed up of being on hold and having to explain the emergency to four separate operators.
Shop around for the best deal
The best advice I can give you is to thoroughly research all of your options and find a company that’s willing to offer you everything you need (always check the small print) at a price you can reasonably afford.
If you want ultimate peace of mind and cover for call-outs 24/7, 365 days a year, a maintenance contract with a larger company may be worthwhile. However, if in most cases your tenants can wait until the next day, you could potentially save a lot of money with a service contract from a smaller company.
If you do decide to opt for a maintenance contract, you may find my blog post ‘Landlords: 8 Questions to Ask When Choosing the Right Maintenance Contract for Your Boiler’ to be of help.
Remember, if something seems too unbelievably cheap, it’s probably a ‘new customers only’ offer, which may mean itwill go up significantly next year. Or you may find there’s a £50 excess for each call-out.
I hope this blog post has helped clear things up a bit when it comes to maintenance contracts and service contracts for landlords. It can be a bit confusing, which is why I recommend thinking carefully about exactly what you need and checking the small print to ensure you’re not going to be paying for anything extra.
Remember, a maintenance contract might not be necessary if your boiler is still under guarantee, and you could save a lot of money with a service contract that only covers things such as your annual service, CP12 certificate, pipework and radiators etc.
If you’re still unsure, feel free to leave a comment at the end of this blog post and I’ll try to answer as helpfully as possible!