Deferred Maintenance and the Growing Property Risk Facing Educational Institutions

Educational institutions face many competing budget priorities that can compel decision makers to defer annual maintenance projects for perceived higher priorities, such as staffing needs, program enhancements and other strategic objectives. Over time, systemic deferral of scheduled maintenance and capital projects creates a significant unrecorded liability and shortens facility life expectancy. The escalating cost of deferred maintenance is now one of the most significant property risks facing educational institutions.

At one Canadian university, the deferred maintenance backlog has grown to $1.3 billion and continues to climb, with Ontario universities averaging a three-year facility condition index of over 16% in 2025 — a benchmark that compares the cost of fixing deficiencies to the cost of full replacement.¹ Public K-12 schools face their own infrastructure gaps, driven by aging buildings and underfunded maintenance budgets. Independent schools contend with a structural blind spot: Nonprofit accounting standards don't require disclosure of deferred maintenance liabilities on financial statements, making the backlog invisible to boards and stakeholders.

What deferral really costs

In Ontario, school boards face a current infrastructure backlog of $6.5 billion, a figure independent government analysis projects could grow to $22.1 billion within a decade if funding doesn't keep pace.² In practice, the cumulative effect of deferral is often far worse than the up-front numbers suggest.

Consider a straightforward scenario: A roof section shows wear in year one, with an estimated repair cost of $80,000. By year three, water infiltration has damaged ceiling tiles and saturated insulation, and the cost has grown to $220,000. By year five, mould in two classrooms triggers a partial closure and $600,000 in remediation. By year seven, structural damage requires a full roof replacement, pushing total costs to more than $1.4 million — a 17.5-fold escalation from the original $80,000 decision.

And that's before the insurance implications. Repeated claims can trigger underwriter scrutiny, water damage exclusions and, eventually, questions about future insurability and premium escalation.

Building a proactive maintenance strategy

For educational facilities management across all sectors — early childhood, K-12, higher education and vocational — the path forward requires governance, documentation and a capital strategy that leadership and boards can see and act on. Preventive maintenance for educational institutions is a risk management function, not just a repair queue.

Eight practices that position institutions to manage facilities risk:

• Regular facility assessments — Every building evaluated on a defined cycle, at minimum every five years, by qualified professionals
• 10- to 30-year capital plan — A forward-looking model of asset ownership costs, not just an annual repair budget
• Life-cycle cost modelling — Total cost of ownership informs replacement timing and every capital decision
• Documented backlog with cost estimates — A quantified, costed backlog is the foundation for prioritizing resources and reporting to leadership
• Annual reinvestment at benchmark — Set an annual funding target for physical plant replacement, repairs and special maintenance; document shortfalls when budget constraints arise
• Risk-based prioritization — Health and safety rank first, followed by building condition, operational impact and asset age
• Regular property valuations — Undervaluation limits an institution's ability to recover from a loss; valuations should keep pace with actual replacement costs
• Annual board reporting — A facilities dashboard keeps trustees informed and accountable

When facilities risk is visible, it becomes manageable. The institutions best positioned to protect their students, staff and assets are those that treat deferred maintenance as a risk management priority, not just a budget line.

Connect with HUB International's education insurance specialists to start the conversation about your institution's facilities risk profile and the maintenance strategy that protects your campus, your people and your insurability.

¹ University of Toronto, Facilities & Services, "Deferred Maintenance Report 2025," February 2026.
² Financial Accountability Office of Ontario, "Ontario School Boards: School Building Condition, Student Capacity and Capital Budgeting," December 17, 2024.