Question
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Ken,
When are you going to have contracts that cover all of these video RMR products? Or do your current contracts cover all liability with video already?
Thanks,
Sean in STL
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Answer
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All the Standard Form Contracts provide protection to alarm companies for the various services specified in the contracts. Video monitoring for primary or verification is becoming more popular and the good news is that the Standard Monitoring Contract already covers this service; no new provision will be needed. That would apply to the All in One, Commercial Lease and all other contracts that call for central station monitoring. These contracts also cover audio, but as you know that presents issues relating to installation.
Also popular is a camera system that the subscriber can assess over the Internet that is not central station monitored. This may be independent of a security system and if there is no central station monitoring of the cameras or an alarm system then this product is something other than a security system [unless it's watched by on site security personnel].
Video, like all other security devices, should be installed only with proper contracts that insulate or limit your liability.
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how companies are valued
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Ken,
After reading Mr. Epstein's comments on how alarm companies are valued, I started wandering is our company structured in the best manner possible for future growth and for the highest valuation possible. Should a basic alarm company be structured as a C or S corporation or is a LLC structure suitable for this type industry? Your comments are most welcomed.
Thank you,
F. M.
D. Security
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Answer
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This question refers to Barry Epstein's comment circulated on March 14, 2012 [you can read it here if you missed it).
The answer is easy. Subchapter S corp is the best choice. Then LLC. More than likely only very large corporations would elect C status with the Internal Revenue Service. Note however that the corporate [or non corporate] status of the seller is not usually important to the buyer. The buyer is purchasing assets, not corporate stock or seller's liabilities, which would include tax obligations. The issue is important to the seller because a C status corporation could result in double taxation, on the corporate and then personal level. To check out your alarm company's value, you can go to Whats My Alarm Company Worth ?
WHATS MY ALARM COMPANY WORTH ????
Whether buying or selling you should be represented from the start by competent lawyers specializing in the alarm industry. The Security Industry Acquisition Group at Kirschenbaum & Kirschenbaum [ www.KirschenbaumEsq.com ] has the most skilled attorneys ready to assist. Contact Jennifer Kirschenbaum,Esq., at 516 747 6700 ext 302 or Jennifer@KrschenbaumEsq.com or Dennis Stern, Esq at 516 747 6700 ext 323 or DStern@KirschenbaumEsq.com. You can also get a quick or detailed analysis of what your alarm company is worth by going to whatsmyalarmcompanyworth.com.
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re comment on ADT's challenge to fire district
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If I understand this, the taxpayers pay the cost of central station equipment and UL Certified Monitoring Personnel. Then the property managers/owners pay again for central station services. And, at the same time drive up the cost of all services from local alarm companies. And, be removed from daily activity and services provided by the alarm company.
Ed
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Response / comment
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Incorrect. Initial equipment purchase is funded by an alarm company or a lease with a buy out and actually paid for by monitoring revenue, depending upon ownership of the equipment. All service is provided by a reputable professional licensed alarm company. In building fire alarm work is provided by any company of the owners choice. This is in fact remote station services and not central station services. True central station service for fire alarms require runner service per NFPA 72 which is apparently seldom supplied. Monitoring is provided by the same professional municipal dispatchers trained to take 911 calls and dispatch fire, police and EMS. Taxpayers trust they are qualified to send an ambulance, a police response, or a fire truck. They are qualified when properly trained to also monitor alarms and their credentials speak for themselves. This is a fee for service model with no additional burden on taxpayers who do not use the service. In some cases the revenue has helped cash strapped municipalities preserve the high level of critical emergency services that all taxpayers have come to expect and often demand. The monitoring revenue has saved the jobs of dispatchers and fire service personnel by preventing layoffs and may have actually saved taxpayer lives and money.
Steve