QUESTION:
Hi Ken -
My customer purchased a building in an industrial park. Title has closed. The previous owner who left two years ago, had contracted with an alarm company. I told my customer I would considered the alarm equipment abandoned, and since there was no contract between my client and alarm company then my client could remove or improve the system as he sees fit. Am I wrong?
Craig Newby
Alarmco
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ANSWER:
Although alarm companies try to retain ownership in the installed equipment [typical in a commercial lease], and provide in the contract that the equipment forever remains the property of the alarm company. The contract will also provide that the alarm company can remove the equipment when the contract is over, whether pursuant to its expiring term, or breach by the subscriber.
My contract, by the way, provide that the alarm company has the option of selling the equipment for the "agreed upon" price, which is specified in the contract, rather than removing it. Get those contracts at www.alarmcontracts.com. But back to the issue:
Alarm companies often leave their equipment in a location after the subscriber stops paying and moves out hoping that a new occupant will take advantage of the installed system and enter into a contract with the alarm company who owns the equipment. When however does the alarm company risk losing its title to that equipment so that a new occupant, whether owner of the building or a tenant, takes the position that the equipment was abandoned and no longer owned by the alarm company?
There is no quick answer because every situation presents a different set of facts. Alarm companies can take certain precautions to ensure that new occupants are on notice that the alarm equipment is owned by the alarm company. Some companies like to file a UCC-1, but that is technically a financing statement giving notice of a lien, not ownership. Filing a UCC-1 may help, but it's not definitive.
Your equipment should contain a notice that its your property. A sticker on the control panel or other visable equipment would suffice. Notifying a new occupant prompty would also be wise.
As a practical matter, and I know this because this issue comes up frequently in our litigated collection cases when we sue both old and new owners, the longer you leave your equipment in place the more likely you are to lose title. If the equipment is really worth removing, then remove it once you have the slightest notice that a new occupant is in the premises and is not going to sign your contract acknowledging your ownership of the equipment. And, word to the wise, do not permit a new occupant to use the system or provide any service to that new occupant, until that subscriber signs your contract - one or more of the ones you got from me!!
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