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Follow up on contracting outside your license / Owner or tenant signing fire alarm contract
February 8, 2020
Follow up on contracting outside your license from article on January 11, 2020
            Are we right in assuming that we cannot subcontract with a fire sprinkler contractor to provide testing and inspection services for the fire suppression system to an owner who does not want to have two vendors for Life Safety services. They want to use us but our license is only for Fire Alarm. There would be no installation; it would only be the servicing of the system. 
  Thank you,
            I am really conflicted advising on this topic.  I know the answer you want to hear and I’m trying to figure out how to get there.  But what right do you have to contract to provide services that requires a license when you don’t have that license?  Could you contract to provide HVAC service; boiler and hot water service; roofing; appliance repair; architectural services; how about legal services?  This is the logical extension of the argument in favor or permitting you to contract for services for which you are not licensed.  
            It’s confusing because the services seem closely related; fire alarm and sprinkler service.  But it’s not the same license.  
            I opined that contracting for services you are not licensed for is done all the time by General Contractors, who are themselves licensed in most jurisdictions to act in that capacity.  When a GC contracts to provide work the parties, owner and GC, understand that the GC will be bringing in licensed contractors for the licensed trades.  
            So you’re the fire alarm licensed contractor.  The owner requests that you also engage the sprinkler contractor, and understands that that will be a subcontractor who is licensed for that work.  You would provide in your Schedule of Equipment and Services that the owner authorizes you to act as the owner’s representative to engage the sprinkler contractor.  It’s seems like you’re acting as a GC.  
            Look at from a practical point of view.  You have a Fire All in One.  Owner asks you to perform sprinkler or other fire protection [suppression] services.  Are you going get the Fire Protection All in One, or do you expect the licensed subcontractor you find to have the owner sign a Fire Protection All in One?  Without a license I don’t think you should use the Fire Protection All in One.  Therefore, you should not be contracting for the services you don’t have a license for, unless you are a GC.
Owner or tenant signing fire alarm contract
            We have been engaged to install a fire alarm system in a building by a triple net tenant.  The owner of the building has told us that it’s the tenant’s obligation to arrange for and pay for the fire alarm in the building.  We are concerned that a contract signed by just the tenant will not protect us if there is a fire loss suffered by the building.  
Name withheld
            Your concern is well-founded.  If the tenant hires you and pays you that seems to resolve all concerns.  But what happens when the building burns down and the owner seeks to recover damages from you claiming that the fire alarm was supposed to protect the building and its owner?  A lawsuit is commenced and the owner claims to be a third party beneficiary of the alarm contract, or claim that the alarm company owed the owner a duty to perform its contract with the tenant in a reasonable manner, not negligently.  
            Certainly if the owner joins in the Fire All in One or acknowledges its terms and agrees to be bound by those terms, even if not paying for the installation or service, the defense of any claim would be easier.  
            I don’t think you need to get an owner of the building sign every building fire alarm.  I do think that typically an owner will be the one to install and pay for the fire alarm.  However, there is no reason a tenant can’t be the signatory to the Fire All in One.  
            Yes, some AHJ’s won’t even recognize a tenant.  The building permit needs to be signed by the owner; fines for building violations go to the owner; false alarm fines may go to the owner.  When this happens the owner looks to the alarm company.  The alarm company will quickly point out that the owner is not its customer, not under any contract, and that the alarm company owed the owner no contractual or other duty.  If that argument fails, the alarm company will be relying on its indemnity clause in the Fire All in One, requiring the tenant and the tenant’s insurance company to step in and protect the alarm company.

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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