KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Leased fire alarm system / ISC meetings – schedule your meeting now / Holiday Party 2024 - rsvp if attending
November 9, 2024
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Final days to schedule your free private meeting with KK at ISC East
No "last minute" meetings will be scheduled.
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    If you're interested in a private [yes, it's free] meeting at ISC East [we will be meeting just outside the exhibit hall] please contact Stacy Spector,Esq at 516 747 6700 x 304 or SSpector@Kirschenbaumesq.com. Concierge Clients will have priority.
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Leased fire alarm system
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Ken
As I am sure you are aware of, “leasing” a fire alarm system is a legal situation (at least in Florida), and my question is should the building owner fail to make payments as agreed and become in default of the lease agreement, can you go in and remove the equipment that you still own?
            I am basically talking about this from a legal standpoint because you would be removing a required life safety system. Obviously, the lease agreement has to state that the equipment is leased and that ownership is the company and may or may not have a buyout clause at the end of the lease period because who really wants to spend time removing a system only to have used items that would have only marginal value.
I know there are more than one answer on this, so just a general answer would be acceptable.
Tim
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Response
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            A fire alarm lease is indeed a “legal situation”, but so is every other contract that you enter into.  The “lease” is a contract; you retain ownership of the leased equipment; it’s yours and it’s yours to remove at the end of the lease.
            “Lease to buy”, the dollar buyout at the end of the lease, or any amount really, not just a dollar, turns your Lease into a Retail Installment Contract, which you can’t do for residential customers because your contract does not [if it’s a K&K form] comply with Federal and State Truth and Lending Laws; it’s not intended to.  There is no lease to own in the K&K Contractual Forms.  If you insist on that model, and I do not recommend it, your contract needs a lot of modification.
            You can have buyout options in the alarm lease, but why would you?  The K&K Form Lease is for a fixed term, automatic renewals and gives you the right to sell the equipment to the subscriber for the “agreed value” that should be in the contract or remove the equipment.  The right to remove the equipment is a potent remedy upon the subscriber’s default or upon termination of the contract.  Why?
            The “sale price” is fixed when the contract is entered into; it does not increase or reduce over time.  The older the system the more it might be worth, at least in terms of replacement value, because an older system that no longer complies with Code will need to be brought to Code if it’s removed or substantially modified, which of course it will be if you remove it.
            Can you remove the equipment?  The answer is yes, though it’s not that simple.  You will need the subscriber’s consent to enter upon the premises to remove the equipment, even though its yours, because you cannot trespass or risk breaching the peace.  Next, as you point out, since you are removing a life safety system which required AHJ approval to go in, you might need AHJ approval to remove it.  You might have to resort to a lawsuit to get a judgement from a Court to remove the equipment and possibly require the AHJ to issue whatever removal permit it might require.
I actually haven’t seen a situation where it got to that.  K&K Collect Department has had many collection cases regarding leased systems.  Those cases are often the easiest to settle, either by reinstatement or requiring the subscriber to purchase the system. 
            If removing a leased fire alarm, or even a security system in a place that requires the security system, such as a day care center, you may want to check if the AHJ has any issues with the removal, other than advance notice, which is all the AHJ should be entitled to.  You do have to work closely with your local AHJs so cooperation is often the better option.
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Holiday Party 2024 – this is your invitation - rsvp if attending
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          The K&K Holiday Party will be on December 12, 2024 in Old Westbury, NY from 6:30 to 9:30 PM.  You’re invited, but you do need to RSVP before December 1, 2024 so we can properly plan.  Format is casual dress, cocktails and plenty of pass-around hors d'oeuvres; you won’t leave hungry.  Please send your RSVP to Kathleen Lampert at 516 747 6700 x 319 or KLampert@Kirschenbaumesq.com or Amy Laveglia at 516 747 6700 x 313 or ALaveglia@Kirschenbaumesq.com.
          Come see old and meet new friends at this social event.  Looking forward to seeing you at the party.
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STANDARD FORMS  Alarm /  Security / Fire and related Agreements
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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