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more on subscribers failure to initial contract provisions / licensing across state lines January 26, 2018

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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more on subscribers failure to initial contract provisions / licensing across state lines
January 26, 2018
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more on subscribers failure to initial contract provisions from January 18, 2018 article
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Ken,
    I have your all in one residential contracts and I was unaware that my customer had to initial # 22 and 23.  Any advice?
Paul 
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Ken
    We use some of your contracts.  We've been sending out the Residential All in One for clients that their monitoring contracts needs to be renewed.  We are constantly getting the contracts backed signed, but they forgo initialing various areas.  We highlight the areas to make it simple.  We don't know if they are purposely not initialing or not realizing it.  I guess the big questions, is do we need to to get those areas initialed?  If I call them and ask why the didn't initial and it's because of the language, how do you resolve that?  I do not want to lose accounts.  Yes, I know what you are going to say to that, but I wanted to ask.
Gregg in PA
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Response
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    If a law requires that a provision be separately signed or initialed, you need to get that done or you risk the provision not being enforced.  If the contract is signed then the rest of the contract terms should be enforced.  
    We provide for separate signature or initial in the All in One Agreements because we are concerned that those specific provisions may undergo special scrutiny by a Judge and we want to increase your chances of having the provision enforced.  Certainly a subscriber is going to have a more difficult argument that the provision was obscured and unreadable, or unfair, once it is separately approved.  But most jurisdictions do not require the specific signature or initial, so if you fail to get the subscriber to approve the specific provision the contract, and those provisions, should nevertheless be enforced.
    Gregg is located in PA and there is a requirement that subcontractors be disclosed.  We provide for that in the Disclaimer Notice which in PA we call the Rider and Disclaimer Notice.  The subscriber is required to sign the Disclaimer Notice and that is in addition to the Residential All in One.
    I want to take a moment to comment on a broader problem.  Too many of you are not reading the contracts.  These are your forms; you are presenting them to customers for signature.  You need to know, at least in a general way, what's in the contracts.  You don't need to know the verbiage verbatim, or even fully understand the legal significance of the provisions, but sure as heck need to be able to tell your subscriber where to sign, where to initial and where to sign again.  In fact, that's what you need to be most proficient at, getting the contract signed.
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licensing across state lines
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Ken
    I have licensing question. Our sister company is licensed in California for alarm services and we have a client with multiple locations in other states.  Our client would like us to take over their alarm services similar to the service we are providing them in California. We subcontract our monitoring to a central station that is licensed in all of the states. 
    So the question is, can we hire a licensed alarm contractor in a local region, have them perform the labor related services and installation as needed. Monitoring will be by our monitoring station. 
    We bill them under our company (who is only licensed in California).  Would that be sufficient to fulfill licensing requirements and be able to take on the business in those states? 
Best Regards,
BS
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Response
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    Your plan is to hire subcontractors, who are licensed in the jurisdiction, to perform the installation and service.  Your licensed central station will perform the monitoring.  What's wrong with your plan?
    You are not licensed to perform the installation or service, or monitoring and therefore you can't be the one to contract with the subscriber.  If contracting with the subscriber, which is what you want to do, you need to be both licensed, for installation, service and monitoring, if monitoring is included in the state's alarm license law.  If you subcontract the work, the subcontractor should be licensed also.  
    But there may be some leeway.
    Let's say you are licensed in a state, any state, and your subscriber is also in that state, let's say Texas for purposes of illustration.  So both of you are Texas businesses.  You have an operation that limits itself to Texas where you are fully licensed.  The subscriber however has locations in other states and wants you to provide alarm services from installation to monitoring,etc.  You contract for those locations in your home state, agreeing to perform the work in other states.  
    I think you can do it, at least the installation and service.  You can't, however, do the work.  You will need to subcontract the installation and service to a licensed company.  That subcontractor may have to pull permits and attend inspections.  The AHJ may object, but your argument would be that you contracted in Texas and you will use licensed subcontractors.
    That logic won't work for the monitoring.  If you are going to be providing the monitoring by contract [even though subcontracting the monitoring to a central station], those states that include monitoring as part of their alarm license are going to require you to be licensed to do the monitoring.  Your central station will also require you to be licensed in the jurisdiction, or it should.  
    I am not so sure that the AHJ will make a distinction between installation, service and monitoring, and may require you to be licensed for all services if you're the contractor.  If you appear to be the general contractor you may get away with the installation and service because the AHJ is going to be familiar with the subcontractor, who is licensed.  I know it doesn't seem like there should be a distinction for monitoring, but I suspect there is.  
    The alternative is to find a Qualifier - license holder - in the jurisdiction you intend to do the work.  Could be in-house or someone you engage [see The Alarm Exchange in the License Holder category].  If you have enough business in the licensed jurisdiction then you should consider getting licensed.  Then you won't have to subcontract the installation and service and won't have any issues with monitoring.  This is clearly the more prudent approach.
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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