September 23, 2011
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Question re tenant signing contract where landlord is paying for service
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Ken
Just one question. I have seen contracts enforceability challenged for lack of consideration. How does that relate to the tenant who pays nothing.
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Answer
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Consideration doesn't require money. A tenant is asked to sign a monitoring contract because the service is provided to the tenant, even though the landlord has signed a contract agreeing to pay for the service.
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Question re taxing alarm companies for providing service in city
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Dear Ken,
Love your forum-you are an asset to our industry!!
Need help on a simple question re: requirement to pay cities to work within their borders.
We enter some cities(that our our business is not located in) to install alarms.
We understand that certain cities will impose a business tax on us based on the gross receipts for installations performed within there city which we have agreed to pay.
One city has hinted that they may want to reach outside of their territorial jurisdiction & impose a gross receipts tax on us for monitoring of said alarms even thou the monitoring is performed not in their city.
Is this legal?
I believe this could have tremendous implications for our industry & others.
Would a city be able to impose such a tax on a VOIP company located in another state? How about a company that remotely backs up your computer data to the clouds on a regular basis outside of said city?
I don't think it is classified as a sales tax & am not sure if it can be considered an income tax (I believe they specifically avoid calling it either one of these).
It is a local city business license tax to be able to do work in their city.
This city uses a formula based on ones gross receipts derived from jobs that you perform in their city to determine your annual business license fee.
This could be endless!!!!!!
Please help!
Many Thanks,
Bill
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Answer
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I am not a tax expert, but state's are permitted to tax businesses doing business in the state. The state permits municipalities to impose certain taxes, usually real estate and sales taxes. Some cities can impose income taxes for its residents and those working in the city, such as New York City. I doubt a state or municipality can tax a person or business for income earned outside that jurisdiction, but we learn something new about taxes almost every day !!!
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Comment on likelihood of lawsuits
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Ken,
A quick reply to Dusan regarding suits in small towns versus large towns¦It might have been true years ago when there were local insurance carriers that claims were not pursued in small towns. Today, claims, losses, and recoveries are managed mostly by large insurance carriers that have no affiliation with people in the community. Right or wrong, if a loss occurs and insurance monies are used to recover that loss, the carrier typically has the right to pursue other parties on behalf of the insurred for subrogation regardless of the desire of the insureds.
An example of this is a case where a woman in Illinois fell while visiting her nephew in his condo complex. She was elderly and her medical expenses were extensive. To her dismay, the aunt's insurer eventually filed suit against her nephew's condo association.
While my example doesn't speak directly to alarm industry facts, the idea is the same¦Never assume that you won't be sued and always use proper contracts in our industry. The clause that you have in your contracts not only disclaiming any insurance coverage for casualty, requiring clients to have primary coverage, and requiring clients to waive their insurers rights of subrogation is fantastic.
Best,
David J. Coughlin, Esq. CPP
Corporate Counsel, Contracts/Risk Manager
G4S Technology
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Question re higher standard for jewelry store
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Dear Ken,
We have a new client, a jewelery showroom located on 8th floor in
Manhattan. They are asking us to install a burglar alarm system. After a
walk thru, we decided to install motion detectors in every room, door
contacts, safe contacts as well as a panic button under reception desk.
Due to the delicate nature of jewelery business, do we have to take any
extra precautions (of any kind) in respect to system design, higher
insurance coverage and/or paperwork? Or may we treat it as a typical
commercial burglar alarm installation?
Thank you,
Irakly
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Answer
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Jewelry store in NYC ... You'll likely have to provide a UL certificate for certified central station service, and the installation will have to meet UL standards for that type of installation. In other words, no matter who you are installing a system for you should comply with local codes, AHJ requirements, trade practices and customs. The contract is the same, jewelry store or one chair barber shop.
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Comment on various issues
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Ken,
I find your postings under Various Issues always interesting and helpful. Jim talks about sending a customer the letter to give the customer's insurance company. Here's a couple of things we found helpful (regardless of the wording he chooses). Don't send it to the customer, send it directly to the insurance company. If and when the customer cancels, send another letter stating such. If keeps you in control of this small but important issue. We have also been careful not to call it a 'certificate'. We feel it is not about something we certify.
Ira makes many good points that you can tell comes from many years of experience. The points he make are one way you can define the old school companies. When he describes what our industry has become and sums it up by saying "this is no different than the cell phone companies", he hits the nail on the head. If one studies the downside of the cell phone model, we see that they have made their industry entirely price focused and their only hope for success is long term contracts and proprietary equipment. Who can argue that a customer (who can take his business wherever the service is best) and a businessman (who makes the money up front and can do with it what he pleases) isn't a far superior model? Apparently, it seems that one must choose between business models. The argument then becomes whether the industry chooses it for you (if you cannot find ways to compete with the free installations) or a business in the Alarm Industry still has choices to compete outside of this model..
Zeke Lay
Oklahoma