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Auto renew central station dealer agreements and other onerous provisions
April 3, 2021
Auto renew central station dealer agreements and other onerous provisions
            Our company, NMC is seeing several of our competitor’s agreements and they state that the agreement renews in like terms of the original term. One agreement that I saw was a three year original term and another, a five year original term. The central station is in New York State and I don’t know what the State of New York allows on renewals. But I will say that it seems very excessive to require such long renewal periods. For instance, if the dealer signs a five year agreement and doesn’t give their required sixty day notice at least sixty days before the next FIVE YEAR renewal, he or she is locked in for TEN YEARS.  Dealers really need to read this renewal language carefully because these long renewal terms are killers if they want to get away from that central station for any reason. Are these multi-year renewals even legal in New York? Thanks Ken!
Mark Matlock
VP of Sales
National Monitoring Center (NMC)
            First let me start by saying that a dealer who signs a central station contract without seeking legal counsel is a fool.  Second, even better than seeking legal counsel, get the Rider to Dealer Agreement, which is one of the Standard Form Agreements, a Kirschenbaum Contract ™.  Automatic renewal is only one provision a dealer needs to be careful with, there are many more, and some much worse and unfair to the dealer.  Some of these central stations are just using the same agreement they have used for years, maybe not realizing how poorly they are written, and unfair to the dealer, and others maybe are just creeps [no creeps on The Alarm Exchange in the Central Station category - at least not once I hear about them being unreasonable]. 
            New York does have an automatic renewal statute, but it applies to "contract for service, maintenance or repair to or for any real or personal property", which may not include a monitoring contract between dealer and central station.  Other states may have other statutes that may affect enforcement of an automatic renewal clause.
            There might be circumstances that warrant a long term agreement.  Maybe the central station has advanced a loan, or forgiven set-up charges or agreed to reduced charges or free months or years of service; this is a good reason for a long term contract.  Another central station that "invests" nothing in the deal and charges top dollar has little merit to argue for long term contract and long term renewal. 
             Dealers, if you are about to enter into a new contractual relationship with a central station, or if you are already in a central station but have the right to re-visit and re-negotiate the contract, you have choices.  Here are the choices, most of them anyway:
1.  Get the Rider to Dealer Agreement.  It covers just about all the issues that are important to you, as a dealer, and the central station should agree to 9 out of 10 requested changes.  The Rider will even out the fairness of the Dealer Agreement.  Best option.
2.  Hire a lawyer to review and negotiate the Dealer Agreement.  When you're done paying through the nose, if you're lucky, you'll end up with all the issues addressed in the Rider to Dealer Agreement.  Dumb
3.  Negotiate yourself.  Dumber
4.  Don't negotiate, just sign the Dealer Agreement.  Dumbest

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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