September 14, 2011
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Comments on more comments on general contractor hiring licensed alarm company
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Wow. This is something I have never heard discussed and it happens everyday.
Great topic.
Ron Walters
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It is my understanding that the General Contractor is specifying the requirements of what the alarm must be as outlined by the purchaser and any fees he gets is for being the GC and not selling the Alarm System
Walter Tutor
Tutor Security, Inc.
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Ken,
I'm just joining the conversation regrading the contractor being licensed. Could it be the language is being misinterpreted, and the requirement is that the GC hold a valid license for a GC, not alarm contracting?
That mike make sense. Otherwise, an unlicensed GC could simply hire licensed subs and let them pull any necessary permits.
Jim Elliott
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The general Contractor/Electrician/ is required to be licensed in the State and possibly the local jurisdiction where the work is taking place. They would also be subject to the requirements of that license and the dictates of their Workmen s
Compensation insurance carrier.
I receive calls all the time from out of state companies wanting us to do the install because they are not capable of pulling the required permits.
My first question is always, "May I have your State of Nevada Business License number and Sales Tax number"? The second question is if they are willing for me to do the billing and I'll send them 3% of the monthly revenue for the finders fee as long as the customer exists?
Needless to say they cannot provide this information and they move on to hire some other "company" to provide what they need and at a price that would embarrass anyone who knew what they were doing.
If you "subcontract" for an unlicensed company, you no recourse if something happens other than what "you" provide. And you may well have to be in court to get that as soon as your insurance company finds out you were doing work for a company not licensed to do the work in your area. Or you can always sue the building owner or customer to cover your injury. (Good luck on that one too).
Subcontract at your own risk/stupidity. (And also try and figure out who signs the contract...... Or work without one....Just as stupid)
Richard A Metz, President
Liberty Alarms
Las Vegas, Nevada
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Ken:
Of course I am not an attorney and don’t give legal advice but I am licensed for alarm work in three states and I have talked with representatives of the Electronic Security Board of Licensure in Alabama and the Electrical Contractors Licensing Board in Florida on this issue. I don’t have their answers in writing and people should verify for themselves before relying on it.
The answer I was given for electronic security work in Alabama is that the board doesn’t care who contracts to have the work done as long as the company doing the work is licensed. That board however regulates only electronic security so fire alarm work and general contracting etc. is not covered.
Florida, as usual, is more complicated and dealers should be careful that they do not aid and abet an unlicensed contractor in the view of ECLB. As I understand it if the contractor wanting to subcontract some work is licensed as a general contractor in Florida or is licensed by ECLB to do the work then it is okay for an alarm contractor licensed by ECLB to subcontract to do it. The problem arises when a general contractor is not licensed in Florida or other contractor not licensed to do the alarm work wants to subcontract it to a licensed contractor. It likely would be considered aiding and abetting unless the unlicensed contractor is only acting as a representative of the owner. That is as well as I can remember what I was told, and I would not want to have to try to clarify that distinction. However I would not subcontract to a company perceived to offer to provide alarm work if not licensed for it in Florida.
Ed McDaniel
Wiregrass Systems
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Ken,
To clarify this issue we need to recognize that a General Contractor is LICENSED to contract for building a complete building but may only perform those things defined as part of the act of building in each state. The General Contractor must contract out many of the parts of a building project unless he is licensed in that specialty. In Florida it is defined in the statute. Here is an excerpt from fs 489.113 (3); 489.113 (3) A contractor shall subcontract all electrical, mechanical, plumbing, roofing, sheet metal, swimming pool, and air-conditioning work, unless such contractor holds a state certificate or registration in the respective trade category,……. (Alarms are a branch of Electrical in Fl)
So the issue in the previous letter is that a general contractor may contract for the installation of an alarm system that is part of the Real Property. That is true but, he must hire a properly licensed Alarm Contractor to actually do the work. Monitoring and service is not an improvement to Real Property so it does not fall under the General Contractors license scope, at least in Florida.
Hope this helps,
Mike Fletcher
Heeth LLC
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Ken
In Florida, if the G.C. is licensed, he can hire other licensed contractors. The example of an un-licensed electrical contractor, hiring a licensed alarm contractor is the example of aiding & abetting an unlicensed contractor.
I get calls from out-of-state companies, all the time, wanting us to subcontract work for them. My first question is, “Are you licensed in Florida?†If they are not licensed to sign a contract in Florida, for the area of work that they are contracting, then they are not licensed. They cannot hire a licensed contractor to do their work, pull permits, or anything else.
Ray Yauchler
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Ken,
For years, I have read with interest your blog and I appreciate your noble efforts. It is, however, time to call a spade a spade.
I was a licensed unlimited fire and burglar alarm contractor for about 15 years in Florida.
What Mike Fletcher failed to mention is that in FL, Honeywell, ADT and basically everyone else uses unlicensed subcontractors anyway. They simply never file the 1099s, so there is no paper trail. The same is true in TN. I know, I worked at branches for both in both states. This applies to telephone and outside sales staff, management and installers, all of whom must be licensed subs or full-time employees. Also, all of whom must pass FBI and State background checks that never seem to get submitted. When I checked with the State of Tennessee, one of the largest ADT dealers in the nation had exactly 3 employees with background checks, and it did not include the owner/license holder in either TN or FL!
The sad truth was explained to me by an officer of the Electrical Contractor's Board in FL (the AHJ for alarms of all types). Yes, the laws are on the books. No, they have no budget for investigation and seldom take action even when a licensed contractor provides them with the proof because they have no investigators.
I actually had to hire an attorney to threaten the AHJ with a lawsuit before they shut down an unlicensed company in my home town in the suburbs of Orlando. They simply sent a secretary by to tell him, "Stop that". A few months later, the same AHJ issued a license to the same jerk who had operated the largest alarm company in the county for nearly 20 years with no license, bond, insurance or worker's comp, all required by the laws of FL. Even though the law provides for a fine of up to $10,000 PER DAY for just advertising without your license number in the ad, this crook paid zero fine and was then given a license.
But wait, it gets worse.
A senile old lady ordered some low voltage light switches (nothing to do with alarm) and then changed her mind. In spite of the fact I proved I had refunded her deposit over 4 years before she filed a complaint, I was required to pay the AHJ $1,000 to cover the cost of their "investigation" which consisted of three letters. Why? Because I had a license, bond and insurance!
I was an easy target for extortion by an under funded, under staffed, totally ineffective bunch of bureaucrats who don't know the difference between a light switch and an alarm. Also, they totally ignored the state's statute of limitations. Apparently, if someone files a frivolous complaint 50 years after you do no wrong, you are going to have to pay. I decided to pass.
After moving to TN just to get away from the stench, I find the exact same thing here.
I have looked into it, and GA and SC are the same. In fact, in GA you can get a license for $50 if you know what to say.
Unless and until our industry wakes up to the fact that the only ones with anything to lose are the ones who play by the rules, this problem will only get worse. Unless and until we have a national association willing and financially able to drag these lazy bureaucrats into court and force them to do their job, we are better off without a license.
Liability? Ha. Incorporate, then lease your trucks, building and employees. Put your home and cars in your wife's (or dead uncle's) name or simply mortgage them for more than they are worth. As soon as the AHJ learns you have nothing with which to line his pockets, he will go away.
(Signed): Bitter, broke and gone fishin' on the Tennessee River
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Question re non-compete & confidentiality contracts
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Hi Ken,
Our President asked me about non-compete & confidentiality contracts for current/future employees. Thank you.
SN
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Answer
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All employees should be required to sign an Employment Contract. The Standard Form Employment Contract, designed specifically for the alarm industry, contains a non compete provision and confidentiality provisions. Although different jurisdictions interpret and enforce these provisions with less uniformity than employers would prefer, there is no question that an employer is better off with the contract than not. Where there is a legitimate reason for the restrictions the courts will generally enforce the contract terms.