QUESTION:
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Hello Ken,
It is becoming harder and harder to collect from residential accounts including any type of condo or apartment complex. With this said, it is also nearly impossible to lien any kind of residential development. My question is regarding agreements, would it be beneficial to add a “Consent Judgement” to the agreement for Residential or any other type of install. Would this cover non-payment of monthly fees?
Justine Dattolo
T&R Alarm Systems, Inc.
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ANSWER:
Consent Judgments don't work in most places and are more than likely prohibited for consumer [ residential ] contracts. A consent judgment is also not appropriate because it's really for a debt that is due and certain, not one that is not yet ripe, such as any of the contracts with recurring revenue. So you could use a consent judgment for the balance due on an installation, after it's installed and due, but not get it signed before the job starts. The logic is obvious, a consent judgment should not be able to be entered when there is any defense
You are correct that it's hard to lien a job - filing a Notice of Mechanics Lien. It's also a waste of time, most of the time. Doing a real property search is costly, filing the lien is costly, and foreclosing the lien is almost without exception not economically feasible.
All is not lost however. My contracts provide for the filing of a lien under the Uniform Commercial Code. See prior article on this at http://www.kirschenbaumesq.com/earticle43.htm
Another article that is particularly helpful regarding collections can be read at http://www.kirschenbaumesq.com/earticle28.htm
If you are in the New York metropolitan area you can take advantage of the commercial litigation department at Kirschenbaum & Kirschenbaum PC. We have the largest litigation legal practice devoted to the alarm industry in New York. For more information see http://www.kirschenbaumesq.com/aop04.htm
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QUESTION:
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Ken:
If an account cancels prior to the termination date and another alarm company takes over can I sue the alarm company for “lack of commercial gain” as well as the subscriber? Another alarm company that is very litigious and begins with an “A” did that to me quite a few years back.
Bob Williams
Briscoe Protective
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ANSWER:
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Technically the answer is "maybe". You can't sue another alarm company just because your subscriber terminates with you and they take over. That's not enough information to state a cause of action. The other alarm company needs to have tortiously interfered with your contractual agreement with the subscriber. For more on tortious interference see article at www.kirschenbaumesq.com/earticle319.htm
Unless another alarm company has targeted your subscribers it's not likely to be cost effective to sue them. Sue the subscriber and not the alarm company. If you sue the alarm company you are going to provide the subscriber with a free expert to explain why your alarm or your service was so poor that the subscriber was justified in canceling.