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disclosing codes / do you need to be bonded in CA to sell alarms / more objections to contract provisions / March 3, 2017

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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disclosing codes / do you need to be bonded in CA to sell alarms / more objections to contract provisions  March 3, 2017
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Next webinar - on licensing March 9, 2017
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Note on Webinars.  Our All You Need To Know About webinar series has been well received and well attended.  Thanks to those who have presented and we're looking forward to the scheduled webinars.  If you would like to present a webinar please let me know asap so we can schedule.  Your topic?  Fill in the blank"  All you need to know about ______ [alarm industry issue of course].  
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disclosing codes
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Ken,
    I read all your newsletters. They are so informative that even after 40 years in this business, I learn or re-learn something in each one.
    In regards to the article on January 24, 2017, be aware that some states have provisions that pertain to the requirement to provide the owner with passwords. See Texas Insurance Code Chapter 6002 (formerly Article 5.43-2) Fire Detection and Alarm Device Installation and 28 TAC §§ 34.600 The Fire Alarm Rules.
§34.616. Sales, Installation, and Service.
(b) Fire detection and fire alarm devices or systems other than residential single station.
(6) Upon request of the owner of the fire alarm system, a registered firm must provide all passwords, including those for the site-specific software, but the registered firm may refrain from providing that information until the system owner signs a liability waiver provided by the registered firm.
Thank you!
Respectfully,
Richard
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Response
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    Alarm companies don't like to reveal passcodes for two reasons:
they dont want subscribers meddling with the alarm system, causing problems that the alarm company will later be charged with
they want to be able to hold onto the subscriber, making it costly to change alarm companies.
    More or less the strategy works.  The Standard Form Agreements makes it clear that alarm companies own, forever, the programming as Intellectual Property. 
    Texas does have a law that requires that the codes be disclosed for fire alarm systems, but only after the subscriber signs a specific release and waiver.  I believe we provide that form when you use our Commercial Fire All in One.
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do you need to be bonded in CA to sell alarms
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    California has a slew of laws that apply to home improvement contractors, but these laws do not govern alarm system installations.  Obviously if you are doing more than alarm systems you may be doing home improvement and your contract would need to have other provisions.
    Regarding bonding requirements I had our associate attorney Maureen Beil research the issue and here is her conclusion:
    In California,  there is no requirement in the Alarm Law stating that an alarm contract must provide that the ”subscriber has the right to require contractor to have a performance and payment bond which would be at subscriber’s expense.” There is only a requirement in 7159(a) pertaining to Home Improvement Contracts that such contracts contain “a notice stating that the owner or tenant has the right to require the contractor to have a performance and payment bond.”  This does not apply to alarm contracts.
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more objections to contract provisions
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Ken
    We have a potential customer who has some questions regarding our Commercial Security Agreement, below are there comments and what they would like to see changed.  Would you please review their comments and let me know your thoughts?  In my understanding of what they would like to see removed it would put liability or at least a larger portion onto our company.  I am open to reasonable suggestions by this company’s lawyer but am not open to putting ourselves at risk. 
Please let me know your thoughts.  Feel free to use this in your newsletter with names removed.
anon
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From the subscriber: 
    Please review the language below and resubmit your updated contract.
Paragraph 20 [Indemnity] - Please add the following "NSS shall defend, indemnify and hold harmless Subscriber from and against any and all liens resulting from NSS’s non-payment of its subcontractors and suppliers, and NSS warrants and represents it shall keep the relevant premises and all personal and real property of Subscriber free from such liens.  If NSS fails to release and discharge any such claims of liens of third parties within Ten (10) days after receipt of notice from Subscriber to remove such claim of liens, Subscriber may, at its option, discharge or release the claim of liens, or otherwise deal with the liens claimant(s), and NSS shall pay Subscriber's losses in so doing and/or Subscriber may set off such losses against amounts otherwise due to NSS."
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Response
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    Interesting addition requested since the subscriber isn't objecting to Indemnifying the alarm company, but only wants to add a provision requiring the alarm company to indemnify the subscriber for "mechanic liens" filed by the alarm company's subcontractors or materialmen.  This request is from someone, lawyer or not, who doesn't understand the work being performed by the alarm company. This provision is common in construction contracts for the improvement of real property.  That's not what the alarm installation is going to be.  In fact the contract states clearly that the equipment is to remain "personalty" and not be deemed a fixture becoming part of the real property; that in and of itself would preclude the filing of a mechanic lien.  In any event you can agree to this added provision because it's not going to be an issue.
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WEBINARS:  Sign up for any or all of the webinars that interest you.

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FREE Webinar Series "All You Need To Know About" alarm industry issues. 
Register for one or all.  Each presentation scheduled for half hour to hour.  Not recorded.

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Title: All You Need To Know About Alarm Licensing and Contracts for DIY 
When: March 9, 2017 noon EST
Where: Your computer for power point, live video and call in on computer or phone
What will be covered: General discussion about licensing in the alarm industry for DYI. Different types of licenses, where you need them and how you get them. How and when to use License Holders or Qualifiers for your business and how to become a license holder for a company. Risks involved in not being licensed. Contract you will need for nationwide DIY monitoring agreements.
Who should attend: Alarm company owners, general managers, compliance managers and license holders.
Presented by: Ken Kirschenbaum, Esq.
Register here:   https://attendee.gotowebinar.com/register/2585168820901654273

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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
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