September 10, 2010
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Question: which contracts?
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Ken ,
please confirm that I have selected the right contracts for my
business. I mostly do residential with only a few small commercial
customers. Typical client is a takeover or new residential system. We also
do service for all types of residential system as part of our service. This
may include an existing fire system. I do not do commercial fire systems.
Thank you!
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Answer:
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Get the Sales, Service, Monitoring contracts, and the Disclaimer Notice. Instead of Sales, Service and Monitoring you can get the All in One. These contracts cover any type of security equipment in residence or commercial.
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Comment re Monitoring
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Hi Ken;
As usual, your legal advice is spot on. As to the signing of contracts, may I suggest this to alarm dealers who have customers that are reluctant to sign. I start by telling them that my insurance company requires me to keep signed contracts on file. I go one step further and give them a worst case scenario: I say "suppose your house burns to the ground, and someone gets injured or there is a loss of a life (God forbid.) Regardless of what you (the customer says,) your homeowner's insurance is going to look to subrogate the claim. That means even though I did everything right, they are likely to sue my company as well. The only way that my insurance company will pay a claim, is if all of my paperwork is in order. The customer will sit and think for a moment, and then they just quietly sign the contract. I don't know if my insurance company can avoid paying a claim because of a clerical error, but why do anything to put yourself on the hook? That contract most certainly limits my liability.
John
from NJ
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re Contracts with military personnel
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Ken,
I would look at the military act a little more closely. The act does not apply to security system monitoring. My husband and I operate a small company which does business in an area which is almost exclusively military. Although we do not have to let them cancel at all we do let them out of the contract if they have PCS orders and sell their home. (We do not accept deployment orders or discharge orders.) If they sell the house we can at least try to recoup our loss by signing up the new home owner. We do want to be as military friendly as possible without putting ourselves out of business. Over the years we have had a few customers take our contract to JAG and in every case JAG has sided with us and we have gotten paid on the contract. We make sure we disclose our military policy to all potential customers prior to the contract being signed. It is even part of the recorded QA call done by our funding source after installation. We have operated using this policy for over ten years. If the military member is a renter we will let them out with orders of any kind provided they have paid at least 12 months of the contract. Again this is disclosed up front and the contract is adjusted to reflect the 1 year requirement. Please do additional research if necessary and correct the answer you gave in a previous email.
Thanks,
Ginger Beauchemin, Vice-President
Command Central Security, Inc.
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re Terminating monitoring
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To - Brad (Ohio):
Why are you giving up these 35 accounts so easily???? If they are happy with your service, sub out the monitoring for these accounts (only) to a UL central station. If you’re going to be in the monitoring business, then do it right and have redundancy and disaster recovery. There are, however, some reasons for not being UL listed. Fine. If some customers want the protections of a UL central, then give it to them. You’ll lose some money on the monitoring because of the central’s fees but you’ll still keep the customer and all of those visual impressions from thousands of customers going through the banks’ doors.
David Myers
Myers Protection Services
Indianapolis, IN
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re PERS in CA
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Mr. Kirschenbaum,
I’ve been looking into regulations or special requirements to monitor PERS units in the state of California but so far I’ve not been able to find any. The Department of Consumer Affairs told me that these units don’t qualify as Alarm Systems which is what they regulate.
Do you know of any such regulations or licensing requirements?
Thanks,
Chris
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Answer:
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I don't. Anyone have any info?
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Question: enforcement of contract issues
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Ken,
We have a couple of questions for you. First, will the contract still hold up in court if the client gives us the wrong name or changes their name after the contract is signed? Second, is the contract as strong if we mail the contract to the client, they sign it and return it to us? One of our managers thinks an employee needs to witness the client sign the contract. We have both residential and commercial clients.
Thank you for your time,
Mary Walker
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Answer:
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The contract will be enforceable against the person who signed it, right or wrong name; even if the name changed afterwards. But, it would make things a lot simpler if you knew who your subscriber was. Be more careful signing subs up. Get some proof of identity. That goes for individuals and corporations, especially corporations.
You don't need to see your subscriber sign the contract. Of course if the subscriber later denies signing it would be good proof to say you saw him sign it. But, you can win without that testimony.
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Question: re Monitronics, Brinks Panels
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Great forum, Ken.
Hopefully someone can answer this question. What legal recourse does a Monitronics or Brinks customer have at the end of their contract and want to change monitoring companies? Since Monitronics locks out the communication section and Brinks/Broadview/ADT you have to replace keypads and panel, does the customer have any legal standing to require them to reprogram their panel, or give a rebate when the customer has to purchase a new panel and or keypad?
When we run up on one of these, we can only offer a key pad panel swap at a reasonable price to get their monitoring. Since most of these are into their 3rd or 4th year, the battery in the panel needs to be replaced.
Basically, the customer, at contract end can not get service from anyone but their existing company without paying for another system. Any ideas on what else the customer can do?
Typically, any true ADT system can be reprogrammed and a battery replacement will get them up and running with a new company. The lock code for ADT is well known and their typical panel, DSC or Vista, can be reprogrammed easily. (can't upload or download via computer though)
Thanks in advance
John Elmore
Security By Elmore Inc
Biirmingham, Alabama
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Answer:
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Some states do require alarm companies to disclose codes at the end of the contract term. In New York for example the licensing division recommends it; I don't know that it's a law. It makes sense that the code be disclosed or the panel defaulted to manufacturer's code or another code if the subscriber has faithfully performed the contract. My Standard Monitoring Contract does provide for that.
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re: invoicing subscribers
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In response to Mark S. He may want to tell his customer that his rate is based on an advance payment so monthly invoicing would cost the customer more and many time dissuade him from changing.
Our systems are “Mental Insurance “ against what MAY HAPPEN to a system so once the period is over and no service call was performed or no Alarm condition was prevented many customers have a feeling that they should not rush to pay. Use the insurance industry as an example, everything is in advance or you make payments with interest, because nobody wants to pay a premium after they have found that no incident happened..
Regards,
Bob Williams
Briscoe Protective Systems Inc.
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re comments on contracts and getting them signed
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Hi Ken,
This is in reply to Suzanne Ainsworth's comment about the difficulty of getting contracts signed in the alarm industy.
In my opinion, the main reason there are so many comments about how difficult it is to get them signed is that most of the people in this trade are small businesses being run by people with technical backgrounds and they do not have sales training. It is as simple as that. The whole goal of a sales person is to "get the signature" A technician's goal is to make the system work. I would ask Suzanne to try to remember back when she was going through training how awkward she felt until she had done some role playing and gained experience in selling and "getting the signature". I'm sure that now, she has all the confidence in the world. The same confidence that a trained technician has that they are going to install a good reliable system.
I do not see the combination of both skills in too many people in the alarm trade.
Gene
Reliable Alarm
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Hi Ken;
It sounds like Greg is really doing well without contracts. And I'm sure he will continue to do well, until one of his "friends" houses burns down. Let's hope that one his "friends" doesn't perish in the fire as well. Once there is a catastrophic event, it is taken right out of the hands of his "friend," and the friend's insurance company takes over. They WILL look to subrogate, and if they find that poor placement of a smoke detector prevented the victim from escaping the fire. (Isn't that what their "fire expert" will claim?) Greg should pull a preemptive move and rename his company in the name of the decedent's estate, because they WILL own his company, his house, his car and probably his pet poodle to boot. But go ahead Greg, keep your head buried in the sand. Just remember what you are sticking up in the air left exposed while in that position.
John from NJ
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Ken
Thanks for getting me in the forum.
A few answers to the response you had. I mis-lead you when I said I didn't have ANY contracts. Sorry for that. I do have a contract but it does not have a length of time attached to it. 18 years ago I had my brother contact all the alarm CO's. in his area (yes the "big boy" and small) and ask for a quote for his business. He had 8 quotes. He then gave them to me and I forwarded them to a prominent lawyer in my area to write up one quote for me with little "bits and pieces" from each one. Therefore I feel I have the "best" contract out there! I'm using a little bit of what everyone's using. Again works for me!
On another note.... I bought the 2 alarm companies for 30x rmr and 32x rmr and they have produced quite well.I would never sell for anything less than 35x and if they don't want to buy me for that then they don't have to. (but I bet they would anyway if they want to take me out of the competition.) If I were to sell at 35x rmr x $25.00 per account = 875.00 x1500 =1.3 million. Thats not a bad return on my money and I didn't have to fight going back to get re-signed contracts all the time and people "balking" at going with me for an install because they didn't want to sign a contract. Of course I would never need to sell because I have my little revenue stream from the rmr which is like getting social security every day. I could just sit back and hire people to climb in attics for me when I'm 70, and still "reap the rewards".
Just think of how many jobs I would have lost if I had to make people sign a 3 0r 5 year length of agreement.
So, as you can see, contracts locking someone into your service and "holding them hostage" is not always necessary if you treat them right and have a good business plan.
Greg