When is start date for RMR payments / PERS - medical alert - where you need an alarm license April 8, 2017

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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When is start date for RMR payments / PERS - medical alert - where you need an alarm license
April 8, 2017
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When is start date for RMR payments
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Ken 
    Regarding: Fire All-In-One, Commercial All-In-One, Residential All-In-One, and other contracts
    When does a contract begin- when it is signed or when service begins?
                 For example, you sign a 5 year commercial contract before the building is complete. The project takes one year before they are ready for services to begin.  Does that mean that you lost one of the five years on your contract?  Or do you get 5 years because it begins when services begin?
    When do you start billing?  Customers don’t want to pay until services begin.  If you start billing someone for a service that has not begun doesn’t that make you liable for the service that you are in fact not providing?
    If billing and the contract length are based on the date the contract is signed, we would lose time from the contract and both commercial and residential customers would refuse to pay and be angry.  Is there language we can add to the contracts that billing and the term of the agreement begin based on the date that service(s) begin?
    We invoice on the first day of the month and prorate the previous month based on the date services went online.  We mail invoices the first day of the month with the due date as the last day of the month.  Is this a problem since your contracts read…
     “on the first day of the month next succeeding the date hereof, all payments being due on the first of the month”.
    For example if the date services began was 12/3/16;  Prorate 12/3/16-12/31/16 included on January 2017 invoice, mailed 1/1/17, due 1/31/17
Thank you,
Anonymous
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Response
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    Good question and surprisingly not asked often.  You are correct that the Standard Form Agreements call for the RMR payments to commence on the first day of the month following execution of the agreement.  Why would we word it this way rather than another objective starting date, such as activation of the system; receipt of first test signal?; approval of AHJ; subscriber's first use of the system? etc.  
    Alarm contracts commonly stated that the RMR charges would start upon "completion of installation".  That seemed like a reasonable and objective criteria.  Turns out it doesn't work, especially when the subscriber delays or prevents installation; also when the subscriber claims that despite the activation of the system the installation isn't complete for one reason or another.  We have had many cases where we bring collection cases when the alarm system was not installed or not completed.  The defense on the accelerated RMR charges was that those charges did not accrue because there was no commencement date.  Those defense arguments prompted the change to a fixed date; first of the month following execution of the contract.
    This works for most subscribers because typically installation is within a few days of the contract execution [hopefully you're waiting the 3 days for cooling off, though many of you don't].  Commercial jobs, especially large ones, and commercial fire, typically have a more complicated installation schedule, sometimes dependent on the building going up.  Installation can be delayed a year or more [something we have addressed in the updated Standard Form Agreements, by the way, calling for a delay penalty and increase in purchase price after one year delay].  
    So the first of the month following execution of the contract may not work on every deal.  It's easily handled.  You address commencement in the Schedule of Equipment and Services.  This is your Rider to the All in One and you can use it do make modifications to the printed form when necessary.  The printed form simply cannot address all of the variables that may arise in every transaction.  When you do address the issue be sure that you're not setting yourself up for some commencement criteria that may never arrive or cannot be objectively determined.  If you need assistance wording a particular contract I'm a phone call away.  
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PERS - medical alert - where you need an alarm license
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    It's not uncommon for alarm panels to include a medical alert button.  Unless you intend to be installing and monitoring a PERS - Personal Emergency Response System - you should not be including medical alert as part of your intrusion or fire alarm systems.  We have a separate Standard Form Agreement for PERS; we don not include that system as part of your Residential or Commercial All in One, or the Fire All in One.  
    Compared to the alarm industry the PERS industry is pretty much unregulated.  We have found only two states, Arizona and Florida, that include medical alert in the definition of alarm services.  I believe this is so because PERS was traditionally a stationary unit with a push button that dialed the central station and then permitted two way audio so that the operator could ascertain if there was a medical emergency.  Then pendants permitted subscribers to move around the home.  Now ePers permits subscribers to be anywhere there is cell service; push the button and the central station operator can have two way communication and also through GPS figure out where you are; close anyway.  
    Though similar in technology and purpose PERS differs enough from intrusion and fire systems to warrant its own contract addressing terms and conditions unique to PERS services.  A PERS business model also lends itself to nationwide marketing and services, so the PERS Agreement comes for single state or nationwide.  You can get the contracts at www.alarmcontracts.com
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Title: All You Need To Know About Getting Top Dollar for your  Alarm Business -sale or financing
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Title: All You Need To Know About Alarm dealer program contracts - getting in and getting out
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THE ALARM EXCHANGE

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
516 747 6700
www.KirschenbaumEsq.com
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