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cancellation right - change in law in TN for alarm companies January 13, 2018

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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cancellation right - change in law in TN for alarm companies
January 13, 2018
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cancellation and automatic renewal - change in law in TN  
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Ken,    
    Apparently we have a new law in TN written specifically for Alarm Companies. How will this affect our business and more specifically the All in One?
Thanks-
Chloe in Chattanooga
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Response
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    It took a while but more and more statutes targeting just the alarm industry are making their way onto the books.  Tennessee has a new law that permits homeowners to cancel their alarm contract.  It's not quite that broad, but, believe me, it's going to cause plenty of confusion among homeowners and alarm companies in Tennessee.     
    When the contract is for more than 2 years and it's the subscriber's primary residence, the homeowner can cancel the contract on 30 days notice to the alarm company
  • any time after the initial 2 years, and
  • the owner is required to sell the residential property due to medical reasons; and
  • the owner provides the alarm systems contractor with a letter from the owner's treating physician verifying the medical reasons.
    This law is effective for contracts signed or renewed after January 1, 2018.  
    Tennessee already had a law on the books for automatic renewal, effective in 2010.
    Automatic renewal in an alarm contract is limited to one year renewal, and it can' be waived.  Also, any time during the automatic renewal period the subscriber can cancel on 30 days notice to the alarm company if the subscriber is being relocated to a hospital, nursing home or assisted living facility.  
    I haven't researched what is meant by "relocated" to a hospital.  Would that mean admitted over-night?  Stuck there for a week or month?  Most people don't "relocate" to a hospital.
    So how does this affect the Standard Residential All in One?  Well the initial term is more than 2 years, it's 5 years.  But the automatic renewal is month to month.  But between years 3 to 5 the subscriber could cancel the contract without penalty or acceleration if the statutory criteria for cancellation is met.  
    No change is required in the All in One agreement but you should be aware of the subscriber's cancellation rights under the limited circumstances set forth in the statute.
    Thanks for bringing this to my attention, and for those of you who are not lucky enough to live in Tennessee, keep your eyes open for new laws in your state and keep us posted.  Thanks.
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THE ALARM EXCHANGE

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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