As a broker in the alarm industry myself, I am interested in the comment from Bart about both the buyer and  seller having to pay a fee to the broker. Although such a practice is not likely illegal, I find it troubling. My thoughts are as follows:
1.      Fundamentally I don’t think any broker can ever serve 2 masters. In the case mentioned , the broker should be solely looking after the seller’s interest. I don’t think he can do that if he is also being paid by the buyer. How far can a broker really press a buyer if he knows the buyer is also paying part of his commission? 

1.      Secondly , the fact that it is a smaller block of accounts being sold does not justify getting paid from both ends. Most brokers understand that smaller deals mean smaller overall commissions. That is business in the  M & A world. 

2.      Thirdly, I question why buyers are agreeing to make these extra payments to the broker.  

3.      There may arise a rare situation which calls for payments from both the buyer and seller, but in these rare circumstances, as Ken noted, there needs to be full disclosure and sign off all around by the broker, the buyer and the seller. I can’t tell if that happened in this case or not. 

4.      Finally, in my experience, most alarm brokers run their practice only getting paid by one party, either the buyer or the seller- so if was a seller, I would find one that works that way. 

 Victor Harding
Harding Security Services Inc
Toronto, ON

    I am amazed by the broker conversation- not sure how a broker can represent a buyer and seller at the same time- isn't that's what called a "conflict of interest"- even though the buyer and seller may have a common interest in getting a deal done, the "road map" for the deal usually is very different for the two parties involved, such items as:

  • what constitutes "good RMR"
  • what are the terms of the holdback
  • who has to re-program in the event the accounts can't be moved by a line swing
  • what are the terms of the indemnification
  • and a whole bunch of other considerations relating to deal terms.

    It's hard to understand how a broker could properly represent both sides of the equation;  as to the example of the seller and buyer entering into a broker agreement, not sure why the seller didn't know he was going to be on the hook for a fee- obviously he didn't bother reading his agreement, which is just another example of why it is important to have an attorney who specializes in transactional law, such as our Firm, review all of your documents (whether buyer or seller)  BEFORE you sign them- in the long run, money well spent. 
Dennis Stern, Esq
Kirschenbaum & Kirschenbaum PC
Alarm Acquisitions / Sales Department
    Buyer's premium may be more common in auction situations but certainly not unheard of in brokerage agreements.  Disclosure is essential and Victor is correct, a broker needs to serve one master and commission from both sides makes that a gray area.  Probably the reality is that the one master the broker services is the broker [sorry guys].  He, or she, wants that deal to close.  Ultimately that should benefit both seller and buyer, both of whom are getting what they bargained for.  If one gets screwed then it's really not the brokers fault.  Both seller and buyer should be properly represented by professionals, and that means accountants and lawyers.  Too many accountants need reminding that they are not lawyers and too many sellers and buyers need reminding that they are neither accountant or lawyer.  If your professional is not familiar with alarm industry transactions then bring in those in the know.  Give me a call for the legal and I am comfortable recommending MItch Reitman for the tax and accounting work.  Both Victor and Mitch are listed on The Alarm Exchange.
    For reputable brokers see The Alarm Exchange.
    A client wants to remove line #17 from the contract we purchased from you.  Its about 4 years old.   Has to do with “insurance” is that an issue or liability for us?
Thanks Again
    The insurance procurement provision requires the subscriber to obtain adequate insurance to cover its insurable interests and to name the alarm company as an additional insured.  It's an important provision designed to protect you, but it's one you can give up if necessary to get the work.
    If your contract is 4 years old it needs to be updated.  Get the update at