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 whitelist ken@kirschenbaumesq.com ****************************** Raising customers’ prices for RMR December 20, 2022 *********************** Raising customers’ prices for RMR *********************** Ken We have customers who have signed the ALL IN ONE COMMERCIAL SECURITY SALE AGMT. Do we need to let them know in writing that we are increasing the price or we can just start to collect more money ? Do they need to sign a new agreement? If we raise prices without letting the customer know, do we break the original agreement? Please let me know. Thank You Shlomi ********************** Response ********************* The All in One agreements are very clear on this issue and you can rely on the provision, as long as you haven’t changed it. You are authorized to increase the RMR [this is the monthly charge, no matter how it’s invoiced, i.e., quarterly, semi or annually. You are authorized to raise the RMR by up to 9% per year. This authorization does not require notice or approval, and certainly doesn’t require a new contract or written confirmation. Just as important is that acceptance of the increase is not optional, it’s required. Be sure not to exceed the 9% per year increase because if you do, you have breached the agreement. Amounts inadvertently paid by the customer will be recoverable as an overpayment, and your breach of the contract, if intentional as it surely must have been, will be grounds for termination of the contract by the customer. So, word to the wise to those who aren’t so wise and not using the Standard All in One agreements; you’re on your own and you better check your contract if you have one. Raising your RMR is of course the “name of the game” and it can only be done two ways, new accounts with RMR or raising the RMR for existing customers. Raising the RMR is probably something you should do as a regular course of business. A customer who got billed $30 a month throughout 2022 would be raised to $32.70 if you use the full 9%. That kind of increase is not likely to ruffle too many feathers, but if you have enough RMR it could end up being significant. If your aggregate RMR is $30,000 the collective increase would be $2,700.00; a good chunk of your central station charges. Without attrition over 5 years you would increase RMR by $13,500.00. That will add approximately $500,000.00 to your company’s value. I’ll end with a story I’ve told before. I’m practicing law year or two and alarm client turns over a collection case. So I sue. The RMR is $900 a month; I forget what was left on the contract. Customer calls when he gets the summons and complaint and starts with “do you know who I am and I’ve never been sued before?” I did recognize the name once he told me; it was the publisher of the official newspaper for New York lawyers. Probably the first of many famous people I’ve had the honor of suing. Anyway, he tells me that he wants to just settle. I ask about the alarm, asking if it’s the alarm for his publishing business building. No he tells me, it’s his apartment where he’s resided for over 40 years which the same alarm company [it was Holmes Protection in NYC] and the monthly charge started at a buck or two and over the 40 years just kept increasing to over $900 a month. I settled for a one year free subscription. But the obvious effect of the increase policy was apparent. ********************* To order up to date Standard Form Alarm / Security / Fire and related Agreements click here: www.alarmcontracts.com *************************** 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
