More On Performing Unlicensed Work Or Acting As General Contractor-
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MORE ON PERFORMING UNLICENSED WORK OR ACTING AS GENERAL CONTRACTOR
I appreciate the valuable information that you share with the fire alarm industry. It has been a real eye opener for my business dealings as well as personal dealings. Here's a situation that I would like an opinion on. I encountered something similar in a bid invitation, but fortunately I was able to avoid it since the project was located in a state that my employer is not licensed to perform work in.
A property owner hires an alarm company to make some upgrades to the existing fire alarm system. In order to make some of the upgrades some ceilings and partitions will need to be removed for access purposes. The property owner decides that this would be a good time to make a few other minor upgrades to the building and wants the alarm company to take care of subcontracting the work to the necessary contractors.
If the work was directly related to the fire alarm upgrade I don't think this would pose a problem, but if any of the work is not related to the fire alarm upgrade, would the fire alarm company be considered to be acting as a general contractor, and therefore be subject to licensing requirements for a general contractort? In addition, it seems to me that the fire alarm company may be opening itself up to serious issues with its insurance carrier and the courts in terms of liability, errors and omissions, if anything goes wrong.
Thomas Mockoviak, Senior Engineering Technician
Fyr-Fyter Sales & Service, Inc
Your concerns are valid. A fire alarm company is licensed to perform the services covered by the license and not permitted to perform other activities for which it is not licensed. If the other activities are not licensed then I suppose no license law would be violated, but you raise another valid point regarding liability. A general liability policy with E&O for fire alarm business is not the same coverage that a general contractor would carry. It is also highly unlikely that the fire alarm company would have the necessary contract documents to engage subcontractors to do unrelated trade work.
You need to recognize that a General Contractor needs to be licensed and in order to get that license it is going to have to meet certain criteria. That criteria may include levels of training, expertise, insurance coverage, surety bonds and more. A company licensed as an Alarm Installer or fire alarm installer is not in a position to act as a General Contractor, unless of course if the alarm or fire company also has a general contractor license.
A few scenarios come to mind and I guess many of you cross the line too often.
- Residential Alarm installation is going to require moving 110 outlets, perhaps moving or building a wall or building a cabinet. You don't have a Home Improvement License, but you do have the proper alarm license. Let's assume you don't do the "home improvement work", which you know you shouldn't, and the home owner asks you to engage another licensed contractor to do that work. Should you or should you not tell the home owner that it must contract directly with the other licensed trades?
- Commercial fire installation. You're in a jurisdiction where you can do the entire installation but you cannot hard wire the system to the panel; you need a licensed electrician to make the connection and you don't employ one. Do you hire the electrician as your sub or do you tell the owner to hire an electrician directly?
- You are engaged to install, service and monitor a fire alarm. Owner asks you to engage a contractor to install the sprinkler system or other fire protection devices. Do you engage the sprinkler company or tell the owner to engage them?
Here's one way to stay on the straight and narrow, and not cross the license line. If your Standard Form Contract doesn't seem to cover the work you're considering then you're probably not supposed to be doing it. If you have to call me to find out what you need to engage a subcontractor in another trade then you're not supposed to be doing that. The Standard Form Residential All in One or the Commercial All in One [also the Fire All in One] describe the work you'll be doing and does address subcontractors that you will be engaging. However the subcontractors are the central station for monitoring, third party vendors who provide gateways, installers and repair techs. But you'd have a hard time finding provisions for carpenters, plumbers, electricians, and other licensed trades. That's because the provisions aren't there.
Even our Subcontract Agreement starts off with "both contractor and subcontractor" are licensed alarm companies. That should tell you something. You both need to be licensed.
For information on our Standard Form Agreements contact our Contract Administrator Eileen Wagda at 516 747 6700 x 312 or EWagda@KirschenbaumEsq.com and for licensing questions contact our Licensing Counsel Nicoletta Lakatos,Esq at 516 747 6700 x 311 or NLakatos@KirschenbaumEsq.com. Those of you in the Fire Protection business should contact Jesse Kirschenbaum,Esq at 516 747 6700 x 317 or Jesse@KirschenbaumEsq.com and get on our Fire Protection Industry Legal Newsletter.
COMMENT ON MSH'S COMMENT ON JULY 18, 2016
This is another typical example of an out of state firm that wants to make up their own rules on how to do business in an area that they are not located in and should not do so without their own license. Then they complain about the process and training options to get the license with the related expenses. Don’t they have enough business in the other areas that they do business in? How much business do they have in NYC, five accounts or five hundred that even justifies these complaints?
If you want to play the game then you have to play by the rules whether you like them or not which seems to be the case here. The rules are made for a reason and not to exclude anyone like this person is indicating. If they are talking about fire alarm monitoring in the City of New York, then that is whole different story and culture for a very good reason and cannot be covered in this blog. With twenty three licenses they should have enough coverage for plenty of business without NYC unless they spend the money/time and get the license.
Lastly, if you want help and information from Kirschenbaum and Kirschenbaum then hire them. I don’t recall seeing that you have purchased their agreements and use them. Just looking for a free ride? Also what is the name of your monitoring company, I don’t recall seeing it either?
Too much complaining about nothing. I prefer to remain,
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