September 4, 2010
*************
Question:
***********
Ken,
thank you for your newsletter, as it is the first item I read in the morning.
We have a project in Boston installing a security system in an
abandoned residential property to keep the homeless out. We are using
your standard security equipment lease contract. The owner has
requested that the lessee be in the name of the trust created for the
property. I have not dealt with this situation before. I would
appreciate any thoughts on this situation.
Regards, John
************
Answer:
**********
If the trust owns the property or is the tenant then it is the proper subscriber to sign the contract. A Trust is a separate entity; the Trustee is the party who signs for the Trust. The Trustee is not personally liable, so make sure your Trust has assets. If the Trust is the subscriber make sure that the checks come from the Trust.
***********
Question:
***********
Ken
On a commercial fire alarm contract where the building name has changed due to leased naming rights expiring (i.e. Stadium), and all other items remain the same (ownership, leasing agent, contacts etc.) is there legal exposure if the building name on the contract is not changed?
Thank you,
Carrie
***********
Answer:
**********
You don't need to change the contract if the owner or tenant has not changed. Changing the name of the building is not going to affect the contract. By the way, this same answer applies if the post office for some reason changes the address of the building.
****************
Question:
************
Ken
I received notice that one of our monitored accounts, a country club / restaurant has filed for Chapter 11 Bankruptcy. I have just over three years remaining on a five year monitoring contract. It is a Fire System, located in NY. They need to have the system to stay open as a restaurant, and they plan on staying open for as long as possible while they restructure. I did not have your Fire Alarm Contract at the time, so I used your Standard Monitoring Contract. Do I need to continue to provide service? What are my options?
Dan Mahoney
Safe & Sound
************
Answer:
************
The Chapter 11 filing created a new entity, the Debtor In Possession ("DIP"). You need to either get a new Fire Alarm Contract signed by the DIP or you need to get the DIP to reaffirm the existing contract. You are not obligated to continue to provide service; you are not a public utiltity company. If you terminate service make sure you notify the AHJ.