Advice on EDIL loans / Comment on AHJ requested extras / register today for Financial Webinars - see below September 10, 2020
Homepage > Alarm & Security Law > Alarm Articles > Advice on EDIL loans / Comment on AHJ requested extras / register today for Financial Webinars - see below September 10, 2020
KEN KIRSCHENBAUM, ESQ ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE You can read all of our articles on our website. Having trouble getting our emails? Change your spam controls and white list ken@kirschenbaumesq.com ****************************** Advice on EDIL loans / Comment on AHJ requested extras / register today for Financial Webinars - see below September 10, 2020 ********************* Advice on EDIL loans ********************* Ken, Your firm did a great job assisting security companies in obtaining PPP loans last spring. Many companies applied for and received Economic Injury Disaster Loans (EIDL) as well (or instead of PPP loans). While PPP loans are forgivable, and fairly unrestricted, EIDL loans are a different animal. I am getting calls from Owners who did not let you (or any attorney) review their EIDL loan documents prior to signing them. They don’t realize the standard of need is much higher than the necessity standard that applied for PPP loans. While an EIDL loan is outstanding there can be no dividends or personal expenses paid by the business entity for its owners. The result is that many owners may be in default and not know it. I wrote an article for Security Sales & Integration Magazine that explains the pros and cons (and by cons I also talk about how not to become one) of EIDLs. I encourage anyone who has taken out, or is thinking of obtaining, an EIDL to read the article. Here is a link to the article https://www.securitysales.com/business/your-eidl-loan-has-funded/. Yes, you have to register with SS&I but you should, it is a very valuable magazine. Mitch Reitman Reitman Consulting Group 817-698-9999 http://www.reitman.us *********************** Response *********************** My office represents a lot of alarm companies on their PPP loans and we will be guiding them in the forgiveness process. The EDIL loan and other issues that involve taxing authorities should be reviewed by an accountant. *********************** Comment on AHJ requested extras from article on September 2, 2020 *********************** Ken On the topic concerning the smoke detectors for the residential situation; The installing company said they installed detectors per an approved drawing and those devices were acceptable to the AHJ during plan review. If AHJ shows up and requests additional items I would think any finger pointing would be back at the AHJ's plan review department where a drawing was submitted and approved. Also, the installing company relied on the Architect's drawing. Since the Architect designed it, would they carry the responsibility of a proper design? On a side note, some AHJ's put a stamp on their "approved" drawing that says passing plan review does not constitute an acceptable system and that final inspection may require additional items for code compliance. Anonymous ********************* Response ********************** A change in plans for alarm systems, fire or security, after the contract is signed [or plans approved by an AHJ] is not uncommon. Looking for someone to blame [and that really means “pay for” the changes] isn’t going to be particularly productive, and more likely time consuming, cause delay and sour feelings and relationships. It’s better that any change is contemplated in the contract, and that’s exactly what the Fire All in One does. I suspect that many changes are the result of a change in the construction or design of the premises, change in code, manufacturing issues, job delays accompanied by change in circumstances or other reasons well beyond the control of the alarm company. “Finger pointing” to the Building Department or AHJ isn’t going to accomplish anything; they sure aren’t going to pay for the changes. Looking to blame the architect is also going to be like rolling a rock uphill. In fact, if you signed an AIA form or similar agreement, you may be criticized for not picking up any errors or suggesting changes; neither the architect or the contractor who hired you are going to pick up the tab. That leaves you or the owner [or whoever signed your Fire All in One – could be the contractor who hired you]. Because of the variables mentioned above, and others I missed, you should avoid guaranteeing that the schedule of equipment is set in stone and any changes will be at your expense. ********************** Another comment on AHJ extras ********************** Ken The local AHJ cannot supersede the code. If these plans were drawn professionally and "approved" by the local building (inspector) department as to proper location and functionality, then it is a done deal. The local AHJ cannot, on a whim, say "I think you need additional devices here and there." The code only needs to be met and the sign-off of the plans, by the local building inspector, says that it was. If the floor-plan of the final built house is the same as the drawn plans, with no deviation, this installation should be signed off with no additional equipment needed. We have also discovered in the past that local AHJ's cannot be held accountable or liable for doing or not doing their given jobs. RFA ESS MA ************************ Response ************************ I’m not sure what universe your comment applies to. So when the AHJ – fire inspector – says additional equipment is required and won’t sign off on the job, you suggest that the building inspector will over-rule the fire inspector and issue the Certificate of Occupancy? And when the building inspector won’t, who you doing to call? Ghost-busters? I am sure there are going to be times when the fire inspector or building inspector or AHJ finds that the filed and approved plans and specifications require modification and the changes are going to make sense [or comply with change in code]. Even if the change doesn’t make sense, it’s the AHJ’s call and you either comply with hit or “fight city hall”; and over what? A few thousand dollars in changes [hopefully]. Your contract should require the owner to pay for the changes, and that same provision in your contract should certainly convey the possibility that changes will be required and increase in contract price will also be required. You can certainly come up with more scenarios than I can, but one that comes to mind is a change in equipment between approval of plans and installation or completion. Maybe there’s a recall on by the manufacturer or simply a newer and better product; its no-ones fault, it’s just a sensible change. Someone has to pay for it and it shouldn’t be you; use the All in One agreements and it won’t be. ************************ WEBINAR SCHEDULE AND REGISTRATION ********************* Webinar Series: Financing for the alarm industry When: September 15, 2020 12 PM ET half hour presentation and then Q&A Topic Details: How to Use Lending to Grow Your Business - A general overview of how an alarm dealer can use lending to grow, such as making a acquisitions, buying out a partner, fueling organic growth, consolidating debt, etc. Presented by: Jim Wooster and Jim Wooster Jr. Alarm Financial Services, Inc 866-204-9350 ext 1200 www.alarmfunding.com Hosted by: Ken Kirschenbaum Who should attend: company owners and CFOs Register: https://attendee.gotowebinar.com/register/5986254083373814030 This webinar will be recorded and available at https://www.kirschenbaumesq.com/page/alarm-webinars ****************** Webinar Series: Financing for the alarm industry When: September 17, 2020 12 PM ET half hour presentation and then Q&A Topic Details: How to Finance an Acquisition - A more specific drill-down on this method of growing by purchasing the accounts of another alarm company Presented by: Jim Wooster and Jim Wooster Jr. Alarm Financial Services, Inc 866-204-9350 ext 1200 www.alarmfunding.com Hosted by: Ken Kirschenbaum Who should attend: company owners and CFOs Register: https://attendee.gotowebinar.com/register/4228983813536754190 This webinar will be recorded and available at https://www.kirschenbaumesq.com/page/alarm-webinars ********************** Webinar Series: Financing for the alarm industry When: September 22, 2020 12 PM ET half hour presentation and then Q&A Topic Details: How to Finance Organic Growth - A more specific drill-down on the many ways loan financing can help an alarm dealer grown organically through covering creation costs, enabling leasing, expansion, etc. Presented by: Jim Wooster and Jim Wooster Jr. Alarm Financial Services, Inc 866-204-9350 ext 1200 www.alarmfunding.com Hosted by: Ken Kirschenbaum Who should attend: company owners and CFOs Register: https://attendee.gotowebinar.com/register/3255545487536556558 This webinar will be recorded and available at https://www.kirschenbaumesq.com/page/alarm-webinars ********************* To order up to dateStandard Form Alarm / Security / Fire and related Agreements, click here: www.alarmcontracts.com ************************* CONCIERGE LAWYER SERVICE PROGRAM FOR THE ALARM INDUSTRY You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304. *********************** NOTICE: You can always read our Articles on our website at ww.kirschenbaumesq.com/page/alarm-articles *********************** THE ALARM EXCHANGE
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