KEN KIRSCHENBAUM, ESQ ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE You can read all of our articles on our website. Having trouble getting our emails? Change your spam controls and white list ken@kirschenbaumesq.com ****************************** Late fees June 22, 2022 ************************ Late fees ************************ Late fees is an enduring and continually recurring topic. In most states you can charge late fees on unpaid overdue balances. Some states have statutory restrictions so be sure to check [and K&K does not maintain a data base for this information]. The Kirschenbaum Contracts™ do not provide for late fee to be assessed on late payment. Your remedy for late payment in a Standard Form Agreement is to deem the subscriber in breach of the contract, and the consequences are fair more stringent than adding a late fee. Some alarm contracts actually employ the word “penalty” when imposing a late fee provision. This is a mistake, and unforgiveable mistake from a legal perspective. Simply, “the law abhors a penalty”. Courts won’t enforce a penalty in a contract. A penalty is generally deemed tantamount to “an unconscionable provisions” and against “public policy”. Just the use of the term “penalty” can cause the provision to be unenforceable. Here is an excerpt from a case dealing with a lease for real property where the Court refused to enforce a 5% per month late fee. “The late fee provision of the lease, which enabled plaintiff to assess a monthly 5% charge on all outstanding arrears, is unenforceable as against public policy because it amounted to a per annum rate in excess of 25% (see Penal Law §190.40; Cleo Realty Assoc., L.P. v Papagiannakis, 151 AD3d 418, 419 [1st Dept 2017]). Although defendant failed to argue before Supreme Court that the late fees, even after plaintiff’s voluntary reduction, were usurious, we consider the issue as it is determinative and presents a purely legal argument (see Bank of N.Y. Mellon v Arthur, 125 AD3d 492, 492 [1st Dept 2015]). Accordingly, we remand the matter for a determination whether the late fees, even after plaintiff’s voluntary reduction, were unreasonable and grossly disproportionate to the amount of actual unpaid rent, and, if so, a determination of the amount, if any, of late fees due (see JW 70th St. LLC v Simon, 179 AD3d 408, 410 [1st Dept 2020]).” 501 SEVENTH AVENUE, LLC, plf-res, v. REGINE, LTD., def-app NY A.D. 1st Dept. *********************** To order up to date Standard Form Alarm / Security / Fire and related Agreements click here: www.alarmcontracts.com *************************** CONCIERGE LAWYER SERVICE PROGRAM FOR THE ALARM INDUSTRY - You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304. *********************** ALARM ARTICLES: You can always read our Articles on our website at ww.kirschenbaumesq.com/page/alarm-articles updated daily ******************** THE ALARM EXCHANGE - the alarm industries leading classified and business exchange - updated daily ************************* Wondering how much your alarm company is worth? Click here: https://www.kirschenbaumesq.com/page/what-is-my-alarm-company-worth ****************************** Getting on our Email List / Email Articles archived: Many of you are forwarding these emails to friends or asking that others be added to the list. Sign up for our daily newsletter here: Sign Up. You can read articles and order alarm contracts on our web site www.alarmcontracts.com ************************** 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