Comment on How long to give “early termination” customer time to pay / ISC East private meeting – schedule now September 28, 2024

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Comment on How long to give “early termination” customer time to pay / ISC East private meeting – schedule now
September 28,  2024

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Comment on How long to give “early termination” customer time to pay from article on September 21, 2024

Ken,
  Your response to Roman about how to handle an account that gives a 30 day cancellation notice to an alarm company contains what I believe to be an important error. You state that at the end of the 30 day period the alarm company should NOT terminate services. If you really did mean to say that then I respectfully disagree. The customer cancelled the contract and therefore the alarm company has no obligation to provide service after the effective date of the cancellation. In fact, I would argue that continuing to provide service after such time might even open up potential liability concerns. For example, in the likely cause for the cancellation, the customer going to a competitor, the continuation of service could present operational issues for the account and in turn the Good Samaritan who continues to provide service gratis could be held responsible.
  Also, in the event the customer is just cancelling, there would be a better chance to reinstate the contract and service if the alarm company pulled the plug on service. It gives a sense of urgency. This could even apply in the competition scenario. I remember a number of instances when after the customer realized what his total liability will be for the premature cancellation, he reconsiders, reinstates and the competitor (if there is one) walks away. No downside to this approach because if the customer does not come back 1- the alarm company can still rely on the contract to collect any balance due (including acceleration), 2- there is no potential liability for cancelling the service in accordance with the customer's wishes.
One other note: if this involves a fire alarm account the alarm company may be required by law to notify the local AHJ (that is definitely the case in Boston and in New York City the central station would be cancelling its corresponding TB-60's).
   Robert Kleinman, Esq

Response

          I agree that my response to Roman may have been confusing, and I am going to set it straight right now.
          We need to address security systems, such as intrusion, access control, cameras, anything other than fire or perhaps health equipment monitoring vital organs, etc. Then we will deal with commercial fire.
          I am addressing an account that is in breach of its Commercial All in One for non-payment, though there are other ways a customer can breach that contract.
          First, customer advising it is “early terminating”. That customer may not be in breach yet. It will fall into breach when it doesn’t pay its monitoring or other charges timely, which for monitoring should mean the first of the month in advance. You have to wait until the customer is in breach. While the request or even announcement that the customer intends to cancel could be an “anticipatory breach”, there is no reason to have to deal with that; better to wait for the actual non-payment, which is not likely far off except for customers who pay annually perhaps.
          You can deal with this customer in-house. I think the better practice is to send it to K&K Collection Department. We will be serving a Demand for Arbitration usually within a day or so of receiving the file and filing fee. The customer will see the fix it’s in when it gets the demand. I am not being a “Good Samaritan” which is something I am not use to being called [and does go against one of my favorites, “No good deed goes unpunished”. If the system is working I typically recommend that the monitoring continue, at least until K&K has served its Demand for Arbitration and we get a Response which often claims the system wasn’t working. Central station Activity Reports that show the system is being used and is at least communicating will be persuasive to rebut that claim. Also we if can reinstate the account you will have no work to restore service.
          If we know that system failure is not the reason for the breach I will counsel to terminate service. That will be after some notice is sent to the customer, though that is not required by the contract or law.
          Fire presents different issues. In-house efforts will likely include a Notice of Default. That is not a termination notice. It’s a warning, which can include notice that the fire marshal or AHJ will be notified when the fire alarm monitoring is to be terminated [which has not yet been done]. Be clear, no notice of default is necessary, you can send the account to K&K Collection Dept once the customer is in default.
          Whether you send the case to collections [in which event you are done with any in-house procedures or efforts] or decide to terminate and walk away, you will send a Termination Notice. That notice will be sent to the fire marshal or AHJ. At least one AHJ took the position that the alarm company could not terminate monitoring without getting FD approval. I advised the client that it could terminate without a permit. You will continue to monitor until the time and date set in the Notice of Termination. Robert is correct that you should not continue any service after the termination notice. That would mean you are continuing service without a contract because the contract was terminated.
          A notice to the Fire Marshal can often be effective because an aggressive Fire Marshal will visit the customer to let them know all about Fire Watch or closing the building. But not all jurisdictions have fire alarm oversight or fire marshals or anything close to enforcement, even for commercial fire alarms [at least that’s what clients tell me].
          I hope this is clear enough; if not ask for more clarification.
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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
ken@kirschenbaumesq.com
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