***********************
QUESTION: AVOID RETAIL INSTALLMENT LAWS
***********************
Ken,
    If we do not charge any interest or extra fees for a customer to make payments on an installation, would we still have to meet all the retail installment/truth in lending requirements?  Could down payments and monthly payments just be an “add in” to the All-in-One?
Thanks!
Tena Edwards
A.I.D. Security, Inc.
***************************
ANSWER
***************************
    Best answer is maybe.  Depends what state you're in.  States define a Retail Installment Sale [and contract] differently.  Some states may define it as a sale where there are more than one or two payments for the sale and installation, and it won't matter if you charge interest or not.  You need to be careful with this because there is more to the Retail Installment law than disclosure on interest.  Alarm contracts typically do not comply with Retail Installment Laws unless they are unavoidable, which might be the case if you require a down payment and then balance on completion.  
    Besides Retail Installment Laws you also have to be careful with Home Improvement Laws which usually will require provisions in the contract that are not typically found in the alarm contract.  What constitutes Home Improvement is also defined differently in different states and interpreted differently too.  Some jurisdictions will consider it Home Improvement if you have to drive a nail into the wall.  
    What precautions do you need to take?  Our Standard Form Agreements are customized state by state and we have incorporated the necessary provisions so you can comply, provided you use the contract as we drafted it.  If you make changes let us know, and if you think you need to make the change to comply with a law we missed then send us that law so we can interpret it for you and us.  Our contracts are in use in every state and we get a lot of feedback.  I did make a mistake once; can't recall when though.  Only kidding,  We do rely on feedback from alarm company owners in addition to our continuing research to keep the contract forms in local compliance.
**************************
DISCLAIMER NOTICE
**************************
Ken
    What is the purpose of the Disclaimer Notice
Regards,
Don Shick 
Ultimate Technology & Security Solutions, LLC 
Ohio
*****************************
ANSWER
*****************************
    I decided to respond to this inquiry by checking prior articles on my web site, which you can check as well at https://www.kirschenbaumesq.com/page/alarm-articles
    If you then go to your Edit feature and Find in Top Window, you can put in search words that will find the topic you're looking for.  Here are few I found:
*****************************
Verbal Changes By Subs / Disclaimer Notice – Noticed !!
**************************
Ken
    Had purchased your contracts a few years back & just received the updated version. (Thanks!) Have one question…under number 6 the Residential All in One contract reads “All changes and revisions shall be supplied…in writing.” Currently, we allow our customers to make password and contact list changes via telephone provided they give the correct password. Is that a sufficient safeguard? We get quite a few calls regarding domestic violence/divorce situations and also the last minute “we are going out of town in the morning and need to have so-and-so be contacted first if there’s an activation.” 
    Also, thanks for making the point with my husband concerning the importance of the “Additional Equipment, Systems, and Service Disclaimer.” [This is theDisclaimer Notice] I had read your e-mail and suggested it to him which he promptly brushed off. Hearing you speak about it at the Alabama Alarm Association meeting made the proverbial light bulb over his head go off. If you publish this, please sign me anonymous or you might have to sign me divorced….lol
*************************
RESPONSE
**************************
    The Disclaimer Notice is important because it reinforces the fact that just about every system could have more and better protection and the subscriber doesn't want to pay for it. The Disclaimer Notice has other features as well, such as take over issues, voip, fines and other matters. It's not another contract but an acknowledgment by the subscriber that these issues were addressed at time of sale. The Disclaimer Notice should prove useful as a sales tool as well because it will confront the subscriber with security options that the subscriber will have to decline or agree to include in your transaction. BTW, the Disclaimer Notice doesn't have to be used for Commercial Fire because those systems are approved by AHJ and there need not be any extras or disclaimers.
*************************
SARRG ENDORSES DISCLAIMER NOTICE – AUGUST 11, 2014
****************
COMMENT ON DISCLAIMER NOTICE
****************
Ken,
    Recently one of the 800+ alarm companies insured by Security America Risk Retention Group (SARRG) ask me to review a set of contracts that you provided and I was pleasantly surprised that you have an agreement that I have never seen or heard of before. It is the “ADDITIONAL EQUIPMENT, SYSTEMS AND SERVICE DISCLAIMER NOTICE”. I know now you refer to it often in your articles as the Disclaimer Notice.
    Additionally surprising is that the cost of this agreement is peanuts compared to the benefit it provides. Cost is $175.00 which you informed me is the same price originally charged almost 10 years ago.
    The Disclaimer Notice is not a replacement for the Standard All-in-One contract forms that you make available to the low voltage electronic industry, but this is an absolute essential when an alarm company does a TAKE OVER of any system installed by another company or person.
In today’s business environment many traditional service companies are presented with the opportunity to take over an existing system on a regular basis, and they should take them! However existing installations create special liability risks for the new company.     There can be installation mistakes buried in the walls or in the system programming that may not be obvious to the technician. 
    Additionally, the new customer may not be willing to pay the acquiring company for a comprehensive inspection and I know someone will reply that they won’t take a customer without a pre-inspection, but consider this, 1) the system may be large and the time to inspect without charging the customer may be prohibitive, 2) a complete inspection may require temporally removing items like keypads for connection quality from a painted wall which paint may be damaged, or 3) simply the customer may not allow you the time to do an inspection. 
    There are many more variables, but most importantly before the inspection starts there must be an All-in-One agreement in place, and then after the inspection this Disclaimer Notice which sets forth a method to list any and all deficiencies and allows the customer the opportunity to accept the responsibility not to repair.
The other point of brilliance of this Disclaimer is that it discusses other technologies and services that are available from the service provider and sets forth a manner in which the consumer first acknowledges the discussion and then declines the same and accepts ALL of the responsibility of their decision.
    As the Executive Claims Manager for SARRG, I would be very happy to defend a claim that had both the All-in-One and this Disclaimer, whether a new installation or if the account was a takeover. I recommend that all dealers start using this Disclaimer Notice, it's important! 
Thanks,
Bart A. Didden
Executive Claims Manager
Security America Risk Retention Group – SARRG
bdidden@securityamericarrg.com
866-315-3838
www.securityamericarrg.com
*******************
RESPONSE
*******************
    Thanks for the endorsement. The Disclaimer Notice is not an Agreement, but an acknowledgment from the subscriber that additional equipment and services were discussed and available, and declined. Additionally the Disclaimer Notice addresses take over situations where the subscriber does not want inspection, acknowledges that inspection has revealed system deficiencies and the subscriber either wants to system repaired or left as is.
    Even though the All in One Agreements adequately cover the additional equipment and services issues I believe it's prudent to have the Disclaimer Notice signed by the subscriber. The reason is that too often subscribers try to circumvent or have the contract declared void or unenforceable for a variety or reasons, often claims of fraudulent inducement or lack of understanding or clarity of terms. The Disclaimer     Notice reinforces some very important defense issues and will be useful when defending a claim for a loss or dealing with subscriber dissatisfaction in system design or function. 
    Use the Disclaimer Notice in conjunction with the Standard All in One Agreements, make sure you have your E&O insurance in place, and sleep easy knowing you have protected yourself as best you can.
********************
QUESTION ON DISCLAIMER NOTICE
********************
Ken
    There seems to be some confusion in my office as to the disclaimer and the deficiency section.  Can you explain it in a way that someone who doesnt really understand contracts could understand?  Here is my understanding of it:   We take over a system and the Disclaimer Notice states that we have gone over all the options listed on the Disclaimer Notice with our customer.  The customer has read and understands their  options and has or has not agreed on getting them or not.  Pretty much just covering ourselves that they are aware these options are available and them signing means they know and agree they were informed so if something happens they cant say they didnt know the option was available.   
    And the deficiencies section is for if we find problems with the current system that we believe  should be fixed. We list what we think needs to be done to the system and the customer can then agree to have those repairs or sign off saying they do not want it fixed and we are not liable for the deficiencies they did not want taken care of.  
    Now for a new customer, they really wouldnt have anything in the deficiencies section because its a new system, but they  should still sign it because there is no disclaimer in the All-in-One contract.
    Is my understanding correct?
*****************
ANSWER
****************
    Partly.  The purpose of the Disclaimer Notice is to put the subscriber on notice that there are other security measures, services and equipment available that is not included in the contract and not being provided by you.  It's important because subscribers often claim that they were not made aware of other security which they later claim would have prevented the loss that their alarm failed to avert.  
    Yes there are adequate disclaimers in the All in One contracts and in all the other Standard Form Contracts.  But these disclaimers do not necessarily stand out from the other provisions of the contract.  Because subscribers often claim that they didn't read or understand the contract I think it important that there be a separate document providing the disclaimer information.
    There are two parts to the Disclaimer Notice. First part is for all of the services and equipment the subscriber is not getting.  These don't need to be security you even offer – it could be security measures that the subscriber could get from someone else.  Of course most of the equipment and services can be provided by you and using the Disclaimer Notice is an excellent opportunity to sell those additional services and equipment.
    The second part of the Disclaimer Notice is the deficiency section.  This is where I want you to describe the equipment or services that should be included in the contract but the subscriber has opted not to pay for or get.  It is for protection that would be called for by AHJ, building code, UL, NFPA 72, custom, etc.  For example - “sub does not want back door alarmed”; “sub wants only one smoke detector in kitchen only”;  “all upstair windows not alarmed”, “no monitoring service” or “never dispatch”.    Order the contracts you need today  Order here:  www.alarmcontracts.com
************************