KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Exposure to tenant occupying owner’s house without signing contract/ What contract covers the ARC system
June 23, 2023
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Exposure to tenant occupying owner’s house without signing contract 
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Ken,
          I have a subscriber who owns a rental, and a tenant has lived there for some years, but never signed an alarm monitoring contract.  The owner signed a contract for installation and monitoring, before the tenant moved in, and the owner pays the monthly fee.   Over the years, the tenant has signed service and repair work orders (your form) for such things as cellular module update, battery changes, testing, etc., but not a full monitoring contract, and the owner pays for those services as well.  Your Service and Repair Work Order has an Indemnity / Subrogation Waiver, along with Limitation of Liability as well. 
          I'm wondering if others have approached tenants after such a long period of time to now have a contract signed, and if so, what recommendations do they have if they encounter push back from the tenant.   Have companies cancelled the service if a tenant refuses to sign?  
          Also, I'm assuming the 3-Day Cancellation Notice is still required when signing the full monitoring contract as it is called out on the contract, even though the tenant is not the one paying the alarm company, correct?
          I forgot to mention that alarm system of the rental is partitioned, with the top floor occupied by the tenant and the bottom floor (above ground basement) used for the owner's storage, inaccessible to the tenant.  It probably doesn't make a difference in terms of the signing of the contract, but most of the alarm equipment is in the tenant's unit, therefore cancelling monitoring service of the tenant alone would be awkward and complicated.
  Thanks,
Anonymous Please
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Response
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          These questions are all over the place with omissions of fact that matter.  If the alarm system and monitoring includes any fire alarm components and signals that will expose you to additional significant risks.  If an intrusion system, without panic button, then you would have exposure for burglary loss, but could have exposure for injury to persons on the premises in a break-in situation.  These kinds of losses can easily exceed the typical one million dollar E&O policy coverage. 
          Sounds like you have a residence and you should have used the Residential All in One; the owner signed it.  Then had a tenant move in to part of the premises.  The tenant uses the alarm and calls for service when needed; presumably has the codes to turn on and off and cancel false alarms before dispatch.  Yet the owner is the only one who continues to pay you. 
          So let’s consider the issues that you should be concerned with, which is potential liability.  The scope of your exposure depends somewhat on the system you have and the signals you monitor, fire or intrusion or something else.  We know the building houses the tenant, the tenant’s property and the owner’s property; so both are potential claimants for property loss.  The tenant is a possible claimant for personal injury from fire or intrusion because the tenant is on the property.
          You owe a contractual duty to the owner and your contract with the owner will govern that relationship.  You owe a duty to the tenant that arises not because of contract with the tenant but because you have allowed the tenant to use the alarm system and your services, created an expectation that you will reasonably perform your service and that creates potential liability if you fail to properly perform.  Of course you’re not a guarantor of person and property, but you or your central station can make mistakes that may contribute to the loss.  Good chance you can defend successfully, but without a contract to fall back on the defense will be a lot harder and much more costly, and if the loss is significant enough with horrible facts and damages, be prepared for serious settlement negotiations that may involve your personal contributions.  But hey, think of all the trouble you saved not bothering with proper contracts and how often can this scenario play out anyway?  That’s one way to look at the bright side of things.  The other is that you were “penny wise and pound foolish” [Robert Burton, The Anatomy of Melancholy, 1621].
          What should you do?  The caveat “do not alarm or security work without a contract” applies here and every time.  The tenant should not be using and relying on the alarm system without signing a contract.  In your situation a letter needs to go out to the owner letting him know that it has come to your attention that the alarm system installed in his home [assuming this is residential, but same issues would apply in a commercial situation] that is now occupied by a third party.  The third party will need to sign a contract or agree to be bound by the existing contract, or will not be allowed to rely on or use the alarm system, and if the owner persists on allowing the tenant to act as his agent [without both owner and tenant acknowledging they are to be treated as one, as the owner and his agent] then the owner will be deemed in breach of the contract, services will terminate and enforcement of the contract against the owner considered.
          Don’t shoot the messenger; I didn’t get you into this mess.
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What contract covers the ARC system
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          What contract covers the ARC system?  If you’re not familiar with the acronym you probably don’t care.  ARC refers to the Auxiliary Radio Communication System and it is required in new buildings in New York City [not sure if anywhere else].  As of now and until I am advised otherwise, the ARC is covered by the Fire All in One.  The reason is that my understanding is that the ARC system is installed as part of the fire alarm or in conjunction with the fire alarm system. 
          An auxiliary radio communication system (ARCS) is a wireless two-way building communication system for Fire Department use only that receives and transmits Fire Department portable radio frequencies within the building.  ARCS receive and transmit FDNY portable radio signals throughout the building – enabling radio communication in the event of an emergency or crises. ARCS Operate Continuously, even during power outages, and their main purpose is to assist communication via FDNY radio. There most used today are AM, FM, Shortwave, Longwave, Satellite, Ham, DAB, Walkie-Talkie, and HD radio. Each of them uses a different technology or band. A radio band determines the wavelengths and frequency used and only applies to analog radio. ARC Systems must be designed, installed, acceptance tested, operated and maintained in accordance with FCC regulations, NYC Fire Code section 511, NYC Building Code section 917, NYC Electrical Code 2011, NFPA Standard 72 as amended by 1 RCNY 3616-04, 3 RCNY 511-01 and applicable technical criteria.
          Because the ARC system is required as part of the fire alarm it’s covered by the Fire All in One. 
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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
www.KirschenbaumEsq.com