QUESTION:
This is perhaps unrelated but in the same line as take over of equipment.
What happens when a buyer purchases a resale property with an existing security
system. The equipment is permanently attached to the structure and is assumed
as part as part of the purchase and, pervious owner does not explicitly express
any obligation to his alarm company in the documentation.
Who's equipment is it and can it be taken-over by a new alarm company without
recourse?
Mike
mz@fm-systems.com
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ANSWER:
There are a few general principles of law that come to mind in response to
this question. First and foremost, a party who does not have title to property
cannot pass or give good title. Generally this principle is expressed as "a
thief cannot pass good title to another." There is at least one exception
under the Uniform Commercial Code, and that is that a merchant who deals in
such property does pass good title to a bona fide purchaser for value, even if
the merchant did not have good title.
This exception would not apply in the situation of a home owner selling
his house together with an installed alarm system, nor would it apply to a
commercial business selling its business, including its lease, leasehold
improvements and fixtures. [the exception would apply if an alarm distributor
acquired its inventory from mid night alarm supplies, i.e. off the back of a
truck, and then sold it for fair market value to an unsuspecting alarm dealer.
If the stolen merchandise was traced to the alarm dealer the bill of sale would
legitimized the sale and the goods could not be recovered by the true owner].
My office, which probably starts more litigation for alarm companies than
any other law firm in the country, has sued many home or business owners
because they bought the house, or business premises, with an alarm system owned
by the alarm company and then the new owner refused to recognize the alarm
company as the owner of the equipment, refused to enter into a lease,
monitoring and/or service contract, as the case may be, and otherwise refused
to permit the removal of the equipment. The cause of action is for conversion,
the legal definition of which is the wrongful, unjustified depriving the
rightful owner of property from such property and using same for yourself.
Proving that you are the owner of equipment is not always that easy, or
convincing. A contract with the prior homeowner or business owner (tenant)
that clearly states that you are the owner of the equipment is a good start.
Stickers on the control panel that state that the equipment is owned by you is
also a good idea [but not necessary]. A UCC financing statement can also serve
as notice of your ownership [though it is really to announce your security
interest and not ownership interest], and also not necessary.