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when is leased equipment deemed abandoned?
December 18, 2018
when is leased equipment deemed abandoned?
          Some fire alarm companies in NYC prefer to lease the fire alarm system; the subscriber never owns the system or its components or wire.  It's not uncommon for the alarm company to leave its equipment in place when the lease is terminated, hoping that the subscriber will be forced to continue the lease or a new occupant will find it more economical to enter into a new lease with the alarm company who owns the equipment. That doesn't always happen.
          Assuming the original subscriber vacates the premises and the alarm company fails to remove its equipment, at what point is that equipment deemed abandoned so that anyone else can use it?  When does the original alarm company lose its ownership of the equipment? When can a new alarm company safely use some or all of the installed equipment without fear of getting sued by the original alarm company?  Would the original alarm company be able to claim it owns and can remove not only removable equipment but wiring and piping?    
Another Rich and Kind Man tired of miss information and scare tactics
          Most alarm companies sell the system to the subscriber, but there are a few places where leasing is still the model for some alarm companies.  I see leased camera systems, PERS and sometimes fire when its a commercial subscriber.  
          Especially in a commercial setting the lease relationship is appealing to both alarm company and subscriber.  On a lease the subscriber usually pays a very reduced installation charge and then agrees to a long term agreement, often for 10 years.  The lease payments are fully deductible [rather than depreciated by the subscriber] and the subscriber doesn't have to worry about repair service or monitoring because it's usually included in the lease payment.  In this regard leased alarm equipment is quite different than a typical equipment lease.  In a typical equipment lease [not for alarm systems] the vendor sells the equipment to a leasing company who leases it to the customer.  It's a way of financing and the lease payments are due to the leasing company the same way a payment is due a bank.  There is no service and the leasing company has no responsibility for the equipment or providing any services.  The customer must make the lease payment "come hell or high water", and that's what that kind of lease is called; a "come hell or high water lease". 
          Alarm leases are not disguised finance agreements.  They are true leases.  The subscriber pays the alarm company and the alarm company provides continuing services, such as repair, inspection and monitoring.  The alarm company always owns the equipment.  When the lease is over, for whatever reason, the alarm company should remove the equipment.  
          There are other options however, especially if the alarm company is using the Fire All in One Lease.  That Lease, as well of the other All in One leases, gives the alarm company the option of selling the equipment for an agreed price that is in the lease. That option is commonly exercised when the subscriber defaults and the alarm company commences collection proceedings.
          But some alarm companies never sell the leased equipment and never compromise when it comes to letting another alarm company use the equipment.  The position is that there can be no abandonment.   There is little purpose in arguing that theoretical legal issue because each scenario presents different facts, usually dealing with whether the alarm company sought to remove its equipment, how long the equipment remained after the lease terminated without a demand for removal, whether the alarm company did anything to evince an intention to abandon the equipment or failed to adhere to reasonable demands by the subscriber or new occupant that the equipment be removed.  A judge would have wide berth deciding the issue of abandonment. The law in different jurisdictions could also favor the alarm company or other party.  
          The better practice would be to either remove the equipment quickly after the lease terminated or exercise the option to sell the equipment to the subscriber if you're wise enough to be using the Fire All in One or Commercial All in Onefor non-fire systems.
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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
516 747 6700