QUESTION:

 

 Ken

 

You recently had an article about having a system in a building and said system is leased. The customers moves out without notice and of course owing $'s then new tenant moves in and wants to have another company monitor said system. Are we not entitled to reclaim our equipment back and if so what is procedure, yes we do have a contract with the former customer?

 

Thanks for your input, and also the contract was written by you.

 

Norm K

 

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ANSWER:

 

    The advantage of leasing your system is that you continue to own that system.  If your subscriber defaults you have the right to remove the equipment, or if you have my contract, sell it to the subscriber for the "agreed" value.  This option however is available only against your subscriber, not a subsequent occupant of the premises.

 

    If your subscriber has vacated the premises and your equipment is still installed you can make a demand upon the new occupant for access to remove the equipment.  You do not have the option of forcing a sale of the equipment to the new occupant.  If the new occupant refuses to permit you to remove the equipment after your demand you can commence an action for conversion.

 

    In an action for conversion you would seek to recover not the "agreed" value in your contract with your subscriber, but the actual value of the equipment.  We have a pending conversion action now where we are seeking to recover the actual value of the equipment to the new occupant, rather than the cost of the equipment to the alarm company, the difference being significant in my case.

 

     You need to be careful about a practice commonly followed by alarm companies.  Many like to leave their leased equipment in a vacated premises, or soon to be vacated, hoping that a new occupant will want to take over that system rather than incur the cost of a new installation. While you may have success some or most of the time with this practice, you do run the risk of both the departing subscriber and the new occupant claiming that you abandoned your equipment, and now its owned by the one possessing it.  This is not an altogether specious argument and judges have accepted that defense to conversion actions.  You therefore need to balance your continued ownership interests with the hope or expectation of entering into a contract with a new subscriber.

 

    I have heard arguments that the alarm company should file a UCC against the subscriber showing ownership of the equipment.  My contract does provide for that right, but it's designed to create a security interest in the equipment to secure payment under the contract, and not to notify the public that the alarm company owns the equipment.

It would be a good idea to have stickers on the alarm panel explaining that the alarm equipment is leased and remains the personal property of the alarm company.