February 18, 2012

 

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Question

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Ken

I have a questions about fire alarm panels. We have a high profile customer who hired us to install their fire alarm panels in 2009. They ran into some financial trouble and negotiated with us on the final payment amount. We agreed to their terms and they signed a promissory note. Now theyre coming back and saying that the bank will only release a portion of the funds to pay us with and we need to negotiate the payment amount again. They have also canceled their monitoring with us and want us to unlock the fire alarm panels. Since they havent paid their installation charges in full and are past due on the monitoring accounts can we not provide them with the codes to unlock the panels?

I also have several fire alarm accounts that pay their monitoring bills faithfully but refuse to keep a phone line connected to the panel or keep the power turned off if the building is empty. We have told them many times that if the building catches on fire that the fire department wouldnt be called. What is our responsibility in this situation?

Thank you,

Guyla Saulnier

Special Electronic Systems

Peoria, AZ

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Answer

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Your fire alarm installation for the high profile subscriber is a bit convoluted. Not paid since 2009? Must be some fire alarm system. Then you accept a promissory note which is apparently in default. I think there is a familiar expression that might apply here: Sue the bastard. And, don't give up the code until you get paid. That might save some other alarm company from getting involved and ending up in the hole you find yourself in now. By the way, if you shut down the fire alarm you probably can contact the AHJ and report that- maybe your high profile subscriber will have its building shut down.

Your subscribers who pay for their alarm systems but stop paying for telephone or other communication pathways present another issue. You advise that you are using one of my Standard Form Contracts, presumably for monitoring. That Monitoring Contract [or any of my contracts with monitoring provisions] clearly requires the subscriber to provide a communication pathway so that the system can communicate a signal. The contract is equally clear that your recurring charges need to be paid even if no communication is maintained by the subscriber or if the police or fire department decide not the respond. Your liability is another matter.

If you put the AHJ on notice that you have installed and are monitoring a fire alarm system then you should notify the AHJ that monitoring is not possible. Let your subscriber know that you are obligated, if not legally then morally, to notify the AHJ.

Although you are not contractually obligated to provide notice to the subscriber that it is in breach of the contract by not providing communication it's a good idea. A letter once in a while would be a good idea. If the subscriber stops paying you, sue.