Dealing With Property Manager As Agent - November 19, 2016
DEALING WITH PROPERTY MANAGER AS AGENT
I have a legal question that I need assistance with resolving. I have seen your posts in the AAF and thought this question would intrigue you.
We are security systems installers in Florida and members of AAF. We take our contracts and processes very seriously. We would rather walk away from a shady deal than to pursue it. With that said, we have recently “discovered” that an individual we have several active burglar alarm contracts with is not the actual owner of the residential homes in issue (a fact she did not share with us originally; she said she had recently acquired the homes and would be renting them out). It turns out that she is the property manager (out of state) and has hired another property manager (within the state) to manage these homes locally. So there are three separate parties involved with the properties. We have asked her for a copy of the POA in effect at the time of signing. She does not have any. My question is this: Is the contract entirely void at this point, mainly does the “limitation of liability” clause protect us again the actual owner in the event of a lawsuit filed by the him? I am in the process of issuing cancellation letters for all of these properties and will attempt to recover our equipment but thought there may be something else we can try. Many of the owners are not reachable by telephone and/or do not live here so obtaining their signatures is likely not feasible.
Any assistance you can provide is appreciate.
We may be able to salvage the accounts and the relationship. You are dealing with a property manager, essentially an agent for the principal, the owner of the property. You are upset because you didn't realize you were dealing with the agent rather than the principal. How that agent signed off on the contract may have been a tip off.
There are a few issues that can be quickly pointed out. Agency law is fairly simple to state; sometimes difficult to apply. An Agent is not personally liable when signing on behalf of a disclosed principal, provided the agent has authority, apparent or actual, to act for the principal. In that case it's the principal who is responsible. Here you know you are dealing with an agent but the principal has not been disclosed. First thing you need to do is have the agent disclose the principal.
Second, you need to confirm that the agent has authority to bind the principal. An agent cannot confirm its own agency. In other words, you need something from the principal that expressly confirms the agent's authority, or you can reasonably conclude from actions of the principal that the agent has authority [obviously a less reliable confirmation]. The agent can get a letter from the principal confirming the agency, or show you the agent's engagement agreement with the principal, or you can get email or even a text or recorded phone call that you can preserve. Conduct rather than express confirmation may be the fact that the agent has the keys and is entering into leases.
Next you need to know who you are contracting with. An agent can directly contract with you intending to be the responsible party. You may prefer that when the agent is far more responsible than the property owner, at least in terms of getting paid. The contract should specify that the agent is your subscriber or the agent acting for the principal is your subscriber.
But your question raises yet one more issue. Both the agent and the principal are not going to be the occupant. If you are installing a security or fire system then the beneficiary of your services is going to be the occupant. It's the occupant that is going to have the access codes and passwords and the primary subscriber contact on the Call List. It's not going to be enough that the contract says there are no third party beneficiaries when it's obvious that the premises will be occupied and controlled by the occupant, and not just a squatter but someone who has entered into possession with the consent of the owner, or its agent, and intends to occupy the premises exclusively or at least to the exclusion of the agent and owner. In this case you need the tenant to sign off on the contract. Though the tenant may not be paying you it's the tenant that is going to suffer a loss if there is a real alarm event. Sure, the owner may also suffer a loss, and for that reason the owner, directly or through the agent, also needs to sign the contract.
In all cases its the Standard Residential All in One that all parties sign. It may not be the same contract, but each gets the same form. The owner's contract will indicate that the owner is paying. The tenant's will indicate that the tenant isn't paying but is agreeing to the terms of the agreement, essentially the terms of service. This advice applies in the commercial setting, in which case you will be using the Standard Commercial All in One. Fire has a bit different twist because the fire alarm may actually be for the owner's protection and the owner is the only one signing. That's topic for another article.