KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Comments on 3 day notice of cancellation
November 3, 2022
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Comments on 3 day notice of cancellation from article on October 20, 2022
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Ken,
I have seen the emails from alarm companies questioning the need for the three-day notice of cancellation in various circumstances, i.e. they system is going to take a week to install, the customer calls in asking for a system, etc…
We perform due diligence reviews and the issue of companies not having three-day cancellation notices comes up more often than it should. Typically the selling alarm company is a high end provider that does full perimeter installs for customers who called in for an alarm received a high quality system, and would have never considered cancelling. The Company didn’t see a need for the cancellation notice (it took a week or two to install the system anyway), and, who’s going to cancel anyway?
There are several reasons to give the notice to the customer. First, it’s the law, you have to do it. Second, and perhaps more importantly, when you eventually sell the accounts, the Buyer is going to want to see that you complied with the law and will want to see the Cancellation notices. I realize that there are exceptions to the law, but when we are doing a contract review as part of a due diligence, taking time to research the circumstances surrounding a customer’s situation takes time, a lot of time. Best to include the Cancellation notice in the package of documents that the customer signs and be done with it.
There is a misconception that the three-day notice prevents the Company from installing the alarm right away. I am sure that Ken can clarify that the Notice doesn’t prevent the company from installing the alarm; it simply allows them to cancel. If the customer has an urgent need you can install the alarm, and, if they don’t cancel, all is good.
The Notice is required by law, but keep in mind that the law is a minimum standard. Best to get the Notice for all residential installs. Keep in mind that Ken’s job is to interpret the law for you and keep you out of trouble. It is your job as the owner to not only listen to him, but to go above and beyond the law when necessary. Ken doesn’t want to defend you when there is a claim and you have a deficient contract package, I don’t want to tell you that my client won’t buy your accounts because there are too many contracts with issues.
Mitch Reitman
817 698 9999 XT 101
Reitman Consulting Group
http://www.reitman.us
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Another comment
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Ken:
I was also informed the exception is if you mail the agreement to the customer, they sign and return via the mail – just keep the envelope w/postmark …….
Was I misinformed?
Respectfully,
Joseph (Joe) Pfefer
President & Founder
Jade Alarm Co
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Response
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Keep Mitch’s comments in mind when deciding if you can avoid the 3 day notice for residential customers. When you go to sell the accounts you will have to explain why you didn’t comply for each account out of compliance. A buyer may be willing to listen; maybe not. The retail outlet where customers come and pick up equipment and sign up for installation and after-install services is an exception to the 3 day notice requirement. If all your sales are done this way then you won’t need the 3 day notice in your residential contract. Not many of you operate that way.
Here’s a more traditional way of operating. Your salesman visits the house. Then you send a contract through the mail and wait for it to be signed and returned. Joe’s suggestion is that you keep an empty envelope to “prove” that’s how the contract was delivered and signed. Technically that contract probably doesn’t need the 3 day notice. If the contract is signed while the salesman is on premises, or even if he leaves the contract at the premises to be mailed back or picked up, you need the 3 day notice.
This entire analysis is really dated because many of you will be using electronic contracts, so there won’t be mailing and waiting to get it back in the mail. When contracts are electronic you will be using the Disclosure and Consent to Electronic Contract so that the 3 day notice will be on the electronic contract and the cancellation notice will be part of the documentation.
Also, you’re not going to have a residential contract without the notice and one with the notice to be used at the appropriate transaction. So what are you going to do, cross out the 3 day notice on the contract just because you don’t technically need to give the notice?
It’s just easier to comply with the notice, even when not technically required. As far as doing the job on an emergency basis, getting the 3 day cancellation right waived, that is not available in all [or most] states, and when it is it’s regulated with strict requirements, such as the “emergency” waiver must be separate from the contract and handwritten by the customer, signed by the customer and express the need for the waiver.
Your risk is having to remove the equipment and restore the property; and return all money received. Perhaps far more ominous is an investigation by your state’s Attorney General that you routinely engage in deceptive business practices because you don’t comply with the 3 day notice. That will end in costly nightmares.
Just comply. If your residential contract does not comply get the Residential All in One; right now.
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
www.KirschenbaumEsq.com
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