KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Common challenges to the K&K contracts and how to respond
June 25, 2026
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Common challenges to the K&K contracts and how to respond
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Ken
I have a few question with your contract:
1. I am doing this for the past couple of years and sign many contract for the past 30 years, however, I have never seen a contract for 10 years, furthermore it is auto renewals after 10 years; max contract I sign its 2 years and if you do a good job I continue.
and
2. I wish I would get a 9% increase for my tenant Year After Year, but unfortunately I don’t and therefore I do not have a 9% increase year after year.
name withheld
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Response
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1. The original term, 2, 3, 5 or 10, is up to you. It usually depends on the investment you need to make in the installation, or the reduction in RMR charges, because the bottom line is that you want to make a certain profit on each contract. You also have to keep the contract value on a sale in mind if that is remotely in the near future. So if you do an installation that costs you $1000 for $300, you need to make that installation charge back somehow, and it's not just the $700 you need to make back, because that's just break even, you might figure a sale and installation at $2000, so you now need to make $1300 back. If you would normally charge $20 per month for monitoring, making yourself $15, you have to calculate the recovery of the $1300 over the life of the contract term. $1300 divided by 24, 36 or 60 obviously comes up with a different number that would get added to the $20 RMR. You are depending on the contract being fully performed by the subscriber for your profit on the contract.
The automatic renewal is another issue, and important. The contract does contemplate a long term relationship extending well beyond the contract period. For that relationship to continue, and your contract protection to continue, the contract needs to renew automatically; otherwise you would have to get a new contract signed, or, something you should never do, provide services without a contract. Once in a while a subscriber refuses to have the automatic renewal provision, even the month to month. It's a stupid position, and my position is firm; we can strike the automatic renewal provision if the following is added to the contract.
"This contract will terminate at 3 pm on the expiration of the contract term, ending on __________, and all services will terminate without any notice by Alarm Co to subscriber. If this is a fire alarm or other system mandated by law, Alarm Co will notify the AHJ of termination of services."
Faced with that alternative, the subscriber should chose to leave the month to month automatic renewal provision.
2 Getting the increase in RMR is strictly a business decision and doesn't impair the integrity of the contract or diminish it's protective value. It may however impair it's equity value because a buyer of the accounts may think a contract without an escalation clause is less valuable, especially if its a long term RMR agreement.
Without the contractual provision for right to increase, there is no right to increase, and a unilateral increase on your part is a breach of the contract; the subscriber could claim you breached the contract and then terminate the contract. You would likely not be able to rescind the increase at that point because the K&K contracts do not provide for notice of breach and time to cure, for either party to the contract.
Generally you can resolve this challenge by agreeing to a lesser percentage of increase or perhaps extending the time for exercising the right to increase. This is all a matter of negotiation and ultimately your business decision.
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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
www.KirschenbaumEsq.com
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