How to Draft a Facility Management Agreement (2026 Template and Clauses)

What a facility management agreement is A facility management (FM) agreement is a contract where one party (the FM provider) agrees to run, maintain, and service a building or group of buildings for the owner or occupier (the client). It can cover a single service, such as cleaning or security, or integrated facilities management (IFM), where one provider manages everything: maintenance, cleaning, security, catering, grounds, utilities, and sometimes small projects. The agreement exists to turn a loose expectation ("keep the building running well") into measurable obligations, priced correctly, with clear lines of responsibility and a way to hold the provider to standard. This guide explains the purpose, the clauses that carry the most risk, a skeleton you can adapt, and jurisdiction points to check. It is general information, not legal advice. ## The scope is the contract Most FM disputes come from an unclear scope. Before touching clauses, agree: - Which services? List them. Hard services (mechanical, electrical, plumbing, fabric) and soft services (cleaning, security, reception, catering, waste, grounds).

• Which sites and assets? An asset register or site list, ideally as a schedule.
• What standard? Define outputs, not just inputs. "Reception staffed 8am to 6pm on business days" and "washrooms cleaned to a defined standard twice daily" beat "provide cleaning services".
• Who supplies what? Materials, consumables, equipment, and whether the provider or client holds the service contracts with specialist subcontractors. ## The clauses that matter most ### 1. Service levels and KPIs This is the core of an FM contract. Set service level agreements (SLAs) with response and rectification times by priority (for example, a safety fault attended within an hour, a non-urgent repair within five business days). Add key performance indicators (KPIs) you can measure, and link persistent failure to service credits or step-in rights. ### 2. Charges and the pricing model Say clearly how the provider is paid. Common models are a fixed management fee plus pass-through costs (open book), a fully bundled fixed price, or a cost-plus arrangement. Define what is in the base price and what is additional (projects, out-of-hours call-outs). Fix how and when prices can change, for example an annual index-linked adjustment. ### 3. Health, safety, and compliance FM touches life-safety systems, so compliance is central. Allocate responsibility for statutory testing and certificates (fire systems, lifts, electrical safety, water hygiene, pressure systems). Require the provider to keep records and to follow the applicable safety regime in each jurisdiction. ### 4. Staff, TUPE, and subcontracting When a provider takes over an existing service, staff may transfer by law (for example TUPE in the UK, or similar transfer rules elsewhere). Address who bears that cost and liability. Set rules for subcontracting and keep the main provider responsible for subcontractor performance. ### 5. Liability, insurance, and indemnity Require specified insurance (public liability, employer's liability, professional indemnity where design advice is given). Set indemnities for property damage and injury, and cap liability sensibly against the insurance available. ### 6. Term, renewal, and exit Set the term, renewal, and, importantly, exit management: handover of records, asset data, keys, and access systems, plus cooperation with any incoming provider. A clean exit clause prevents a building being left without cover. ### 7. Data, access, and security The provider's staff get physical access and often access to building systems and data. Address confidentiality, data protection for staff and visitor data, and security vetting. ## A usable skeleton ``` FACILITY MANAGEMENT AGREEMENT 1. Parties and effective date

2. Definitions (Services, Sites, SLA, KPI, Service Credit)
3. Scope of services (hard services, soft services, exclusions)
4. Service levels and performance (SLAs, KPIs, service credits, reporting)
5. Charges and payment (model, base price, additional works, indexation)
6. Provider obligations (staffing, standards, records)
7. Client obligations (access, information, approvals)
8. Health, safety, and statutory compliance
9. Staff and transfer of undertakings
10. Subcontracting
11. Insurance
12. Liability and indemnity
13. Confidentiality and data protection
14. Term and renewal
15. Termination (for cause, for convenience, step-in rights)
16. Exit management and handover
17. Governing law and dispute resolution Schedules: site list and asset register, SLA and KPI schedule, pricing, statutory tasks

- **Staff transfer.** TUPE in the UK, the Acquired Rights Directive logic in the EU, and local labour law elsewhere can move staff and liabilities to a new provider automatically. India does not have a single equivalent, but labour codes and contract-labour rules apply; verify locally.
- **Standards.** ISO 41001 is the international management-system standard for facility management and is a useful reference point for defining quality, though it is not a legal requirement. Mark anything uncertain as "to verify with local counsel". ## Common mistakes - A scope described as inputs ("provide cleaning") rather than measurable outputs.
- No service credits or step-in rights, so poor performance has no consequence.
- Silence on statutory compliance, leaving a dangerous gap on life-safety systems.
- Ignoring staff transfer rules, which creates a surprise cost and liability.
- No exit management, so the building is exposed when the contract ends. ## Doing this work in one place Drafting the agreement from a template, checking that the SLAs and liability caps are sound, tracking variations as sites and prices change, and remembering renewal and index dates are all manual tasks. They can run in one AI contract workspace instead. A tool like [Adira](https://adiralaw.com) drafts from a brief into a structured clause tree, highlights risky terms such as an uncapped liability or a missing compliance obligation, lets you edit clauses in plain English, and keeps a live timeline of changes and key dates. The simple point is that drafting, review, and tracking of an FM agreement need not be scattered across separate tools. This article is general information, not legal advice.