The Hidden Costs of Facilities Management and How to Avoid Them in 2026

Budget vampires such as out-of-scope repairs, inflated vendor proposals, and unrealized warranty coverages are easy to miss if you don’t know what to look for, and they add up quick! Here’s how to handle the costs before they impact your bottom line.

Hidden cost #1: Scope creep for landlord obligations

In long-standing landlord-tenant relationships, lines surrounding ownership of certain facility maintenance and repair tasks can become blurred. Work orders fly fast, and busy managers must react quickly to minimize downtime and customer impact when critical infrastructures fail. This process becomes really involved when managers maintain a multi-site business with dozens or even hundreds of locations.

Common repair and maintenance obligations that usually fall under landlord responsibilities may include:

• Structural repairs (roof, foundation, exterior walls)
• Major HVAC system repairs and building-level HVAC infrastructure
• Plumbing beyond the tenant premises
• Electrical up to tenant connection points
• Common area maintenance (parking lots, sidewalks, landscaping, elevators)

Uptime is vital for managers in industries that assist customers around the clock, such as those in healthcare, retail, and restaurant verticals to name a few. In addition, obligations may vary from business to business. To be sure, dust off those contracts before initiating (or deferring) any major facilities maintenance or repairs.

How to Fix It

The key to avoid paying for projects that fall under the landlord’s purview is to use a tracking system that automates routing specific work orders and providers through the landlord for payment.

Without automating this workflow, busy facilities management teams can accidentally take on out-of-scope R&M projects that needlessly drain time and funds. When facility leaders simplify operations and use software that syncs each party’s contractual obligations, it holds everyone accountable.

Hidden cost #2: Inflated vendor proposals

Many facilities teams have hundreds of locations to manage, making the review process for vendor proposals a daunting task. Besides the time it takes to review them, there’s a wealth of specialized knowledge involved to effectively assess each line item and recognize whether quotes on labor hours and associated costs are in line with local and industry standards.

How to fix it

Misquoted vendor proposals deeply strain budgets, further perpetuated by the limited time facility managers have to review them. Be aware of the following red flags in provider repair and maintenance proposals:

• Inflated part markups
• Excessive labor estimates
• Scope creep

You don’t know what you don’t know. Employ a facilities trade specialist to help close the gaps. Effective partners can provide budget insights fueled from years of specialized experience in the industry, ensuring you never pay more than what is necessary.

Hidden cost #3: Unrealized asset warranty coverage

Do you have a pulse on warranty information for individual assets across all your business locations? If you aren’t tracking key performance indicators here, extra money is spent reactively repairing units that could still be covered by warranty. Conversely, proactive managers can use expiring warranty dates and asset data to plan preventive maintenance before systems break down or require routine maintenance.

Common assets that usually require routine inspections or preventive maintenance to ensure safety, compliance, and operational efficiency include HVAC, plumbing, and electrical systems to name a few.

Facility leaders can reduce downtime of critical infrastructure by staying aware of and being proactive about the following datapoints:

• Asset age
• Install date
• Condition
• Last/ next required inspection/update/calibration

Emergency repairs cost significantly more to complete compared to proactive asset maintenance. Reactive fixes for unexpected breakdowns due to old age or poor conditions almost always halt business if not tracked and planned for in advance, costing businesses more time, money, and credibility in the long run.

How to fix it

Strong facilities managers use technology to track asset data, predict repairs, and plan maintenance. As teams cycle from new to used units across all locations, onboarding software that provides visibility into asset lifecycle helps managers identify the most optimal time for work to be done.

Being proactive saves money

Forward-thinking facilities leaders, COOs, CFOs, and procurement managers recognize the value in finding new ways to optimize operations as they grow.

ServiceChannel software helps brands scale quickly by enabling teams to achieve efficient operations. With functions that provide visibility into landlord contracts, vendor proposals, and asset lifecycles, program managers gain the insights they need to plan ahead, reduce system downtime, and keep business running smoothly day in and out.