KEN KIRSCHENBAUM, ESQ ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE You can read all of our articles on our website. Having trouble getting our emails? Change your spam controls and whitelist ken@kirschenbaumesq.com ****************************** Getting personal guarantee on standard agreements October 11, 2025 ********************* Getting personal guarantee on standard agreements ********************* Ken I wanted to get your professional thoughts on incorporating a Personal Guarantee form alongside our standard agreements. We currently lease approximately 98% of our commercial fire alarm, intrusion, CCTV, and access control systems, and I’m considering whether requiring a personal guarantee—particularly in higher-risk , small business or longer-term leases—would add a meaningful layer of protection for our company. Would appreciate your guidance on any legal considerations, enforcement practicality, or best practices you’d recommend in this area. Warm regards, Gus ******************** Response ******************** The Kirschenbaum Contracts TMCommercial All in One [for security], commercial Fire All in One and commercial Fire Protection All in One all have a personal guarantee on the agreement following the signature line of the subscriber. A personal guarantee is useful when the subscriber is a corporate [or LLC] entity. When dealing with an individual you don't get a guarantee unless you want someone else responsible besides your subscriber. The parent of a college stupent, for example. Mom and Pop corporations are often start ups with limited funds and no track record or a precarious financial risk. Having the corporate entity responsible may not be enough incentive for the corporation to pay your contract. If you contract is a take-over of monitoring, again for example, where you have made virtually no investment getting into the contract or performance, that is quite different if you did a costly installation for cost or below cost, relying on the RMR over the term of the agreement to recoup your investment and profit. In the latter scenario a subscriber terminating the contract early will affect your financial plan regarding that subscriber. It should not be a surprise that subscribers having financial difficulty, perhaps planning to go out of business, will favor their creditors when the corporation's principal has personally guaranteed the obligations of the corporation. Without that guarantee you will be part of the class of creditors the corporation leaves for last consideration for payment. The guarantee will elevate you to the priority class to be paid first. And, even though the corporation may be without assets the guarantor may be solvent. K&K collection department pursues guarantors all the time and often its the guarantor who ends up paying the contract damages long after the corporation has closed and disappeared. By the way, the Fire All in One lease is a strong class of customer. The prospect of removing the leased equipment is enough to prolong the relationship indefinitely, renewal after renewal. A personal guarantee on these agreements is particularly important. Your customer may be a substantial business. Do not expect a personal guarantee from these customers, and you really don't need it. While even the largest corporations have gone belly-up leaving its creditors high and dry, you shouldn't expect an employee of that business to guarantee the contract. In that case the guarantee just stays blank or you can strike it. *********************** STANDARD FORM AGREEMENTS: To order up to date Standard Form Alarm / Security / Fire and related Agreements click here: www.alarmcontracts.com *************************** CONCIERGE LAWYER SERVICE PROGRAM FOR THE ALARM INDUSTRY - You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304. *********************** WEBINARS: https://www.kirschenbaumesq.com/page/alarm-webinars *********************** ALARM ARTICLES: You can always read our Articles on our website at www.kirschenbaumesq.com/page/alarm-articles updated daily ******************** Wondering how much your alarm company is worth? Click here: https://www.kirschenbaumesq.com/page/what-is-my-alarm-company-worth *********************** THE ALARM EXCHANGE - the alarm industries leading classified and business exchange - updated daily ************************* PODCASTS: https://podcasts.apple.com/us/podcast/ken-kirschenbaum-presents/id1794851477 ************************* Getting on our email list / Articles archived: Many of you are forwarding these emails to friends or asking that others be added to the list. Sign up for our daily newsletter here: Sign Up. ************************** 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
