Question:
Hello Ken
We have a particular small motel who has been a customer since 1997 with a
contract for fire alarm monitoring signed at the time the system was
installed. The installation was performed by another company and we have
been only doing monitoring. We recently had a problem with this customer
and decided to cancel them when we discovered that ownership changed about
five years ago and we had not been aware of the change. We are giving them
a letter today indicating that we are terminating our monitoring service in
15 days.
Would our contract be of any effect in a situation where we have a contract
with an initial owner, then a new owner takes over, does not notify us of
the change and keeps paying the monitoring fees. They have an 81/2” x 11’
plaque on the wall stating “this property is owned by....”. Also, I presume
their checks reflected the name change (I haven’t verified that) but we
certainly don’t make a habit of looking for name changes.
What are you thoughts on whether we have a responsibility is to identify
such a change in ownership? Also, what would our position be if a loss were
to occur in this situation?
Thank You
Jim Hamilton
Greystone Systems
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Answer:
My answer would be dependant upon your contract terms. For example, your
contract may permit the subscriber to assign the contract; it may have
specific provisions dealing with your right to terminate.
Assuming however that you use my standard monitoring contract, the
subscriber had no right to assign the contract.
In your case you have no contract with the new motel owner, unless you knew
of the change of ownership, continued to provide your monitoring service,
and the new owner in some way acknowledged that it knew of your contract. I
would not count on that unless the new owner signed some assumption of the
existing contract.
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It is essential that you know who you are accepting checks from. You should
train your staff to look at the checks, even if you have a lock box or
automatic deposit system, you should look at the checks at some point, even
if after deposited. The checks will usually have your subscriber's correct
name and you should make sure the contract has the correct name. When you
see a change in names you have to make inquiry and get a new contract.
The bottom line is that you cannot service a subscriber without a contract,
and that is exactly what you are doing now.
In your case because you have provided this service for 5 years I suggest
that you give notice of your termination of service. I don't know if you
will have to notice the fire marshall or fire department in your area, but
if you do, then be sure to follow up with that.