September 7, 2010

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Question

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Ken

    I have a question on the legality of canceling subscribers monitoring service for standard home or small business burglar alarms. We are an over-lenient company and rarely harass customers about being late on payment. However, I have a single account now that owes for a whole year of monitoring service and several that are almost always 60-90 days late.

    Are there any legal restrictions to simply terminating the monitoring service when it is NOT commercial fire alarm monitoring after having sent invoices and notices of late payment?

Ralph E. Brickley

Innovative Security & Communications

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Answer:

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    Your termination rights should be spelled out in your contract.  My Standard Form Contracts permit suspension or termination, even without notice.  However, I suggest that you do give notice.  Make sure the notice is unequivocal, which means you specify the date and time that service will terminate, and do not make it contingent on getting payment or anything else.  The termination notice should be just that, not another opportunity to cure the default.

    The reason for this is that it will leave no doubt that the service is terminating.  Be sure to know your jurisdiction's requirements regarding termination of alarm service.  Some jurisdictions require notice even for residential intrusion systems.  [I don't know which ones off-hand.]

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Question:

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Ken,

    Recently we have had requests from new customers in the military to be released early from their contract due to the Service Members Civil Relief Act, due to relocation.  The contracts were signed while the customer was already on active duty.   What is our legal right and obligation with regarding to early termination from Military Personnel?

Lori

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Answer:

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    As a practical matter you can't hold them to the contract.  You can't pursue any claim against them while they are in the military.  I suggest you gracefully permit them to cancel without penalty.  I didn't bother to read the statute thoroughly - anyone have a different opinion?

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Question:

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Ken,

    I have a monitoring question. I have a number of banks.(35) That have chosen to go with a much larger monitoring company.

They have no problems with the monitoring, but want disaster recovery. Which I do not have. The contacts are all at least 3 years old. The contracts are all expired.

    I have agreed to change all of the dealer codes back to factory default. I also instructed them that I would be defaulting all of the programming in the panel to relieve me of any programming errors and liability.

    They also are asking for zoning of all of the systems and I refused to give them that information. If I take over a system I alway start from scratch. I do not ask the previous alarm company for information.

    Is this the correct way of handling this???

Thanks

Brad

Ohio

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Answer:

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    I don't think so.  What right do you have to default the programming and leaving them with no alarm system?  If the subscriber owns the alarm and you're only monitoring, then all you should disable is the monitoring.  Some jurisdictions may even have consumer statutes dealing with this issue and protecting the subscriber.      What about your concern that you may be held responsible for errors even after another alarm company takes over the system?  Which is a legitimate concern because if there is a loss and it can be traced to you, you may be responsible.  Which brings me to my favorite topic, what are you doing monitoring subscribers with expired contracts or no contracts?  You can't be that concerned with liability exposure if you're sloppy enough to work without current, up to date, properly drafted, alarm contracts.  Start with the Standard Form Contracts and go from there. 

    More to the point, once another alarm company takes over, at some point you will be removed from the zone of exposure.  It's a fact-sensitive analysis, however.  The new alarm company will have to have done something to remove you from that zone, or had the opportunity and responsibility to inspect or service the alarm system.  The legal theory for your removal from liability is that the new alarm company's acts were the superceding cause of the alleged negligent acts, letting you off the hook. 

    If you are agreeing to do anything for the subscriber, even defaulting the monitoring codes, you can ask for a general release.  That will get you out of any liability in the future.

   By the way, doesn't your wholesale monitoring company have a back up plan?  Almost all of them do.