KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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When is new contract needed for repair / When is repair a new sale requiring 3 day notice in CA
September 22, 2022
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When is new contract needed for repair
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Ken,
If we have a client that has signed K&K’s All in One and they need service work at a later date, is it ok to proceed with the work via telephone call request or text message from them? And, is there a limit to this type of work or request, such as anything over $1,000 requires a signed document or email confirmation?
Thank you,
Name withheld
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Response
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You are right to be concerned and you should never do any service [repair] work [inspection] without a written contract with all of the contractual protection you get from the Kirschenbaum Contracts™. The All In One agreements provide for repair service and inspection services on an optional “per call” service or on a Service Plan with RMR [recurring monthly revenue].
In your case you’re asking about a per call relationship [otherwise you would be performing the repair under the Service Plan option]. As long as the Per Call box is checked in the All in One you can perform the service call without further documentation, at least as far as liability is concerned. However the per call option requires the subscriber to pay for the service call at time of the call and you may want to present an invoice to confirm the work and the amount to be paid.
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When is repair a new sale requiring 3 day notice in CA
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Ken,
When starting a new residential job (California), I usually visit the customer's home to look at the job, gather my information and email back a detailed proposal. If they accept the proposal I make another visit to their home, specifically to go over the job, to sign contracts, (I use your Residential All-in-One), including the 3-Day Notice, and I schedule the work, always beyond the 3-day period to give the customer ample time to cancel.
Occasionally, not often, when responding on a service call to one of my residential accounts to repair or replace a part, the customer will request an upgrade, or other changes, that will put the job beyond the $750.00 limit of a California Service and Repair contract requirements. For example, the repair will include adding additional equipment or upgrading the keypads to touchscreens. Or, another scenario would be the customer is replacing their windows and doors, will be converting from hardwire to wireless sensors, requiring a new alarm panel, and new keypads. Or, a customer's system is now obsolete and customer wants to upgrade to the latest technology.
I suppose I could do what I do on new work which will prolong the process by visiting the site one day to sign contracts and then wait at least 3 business days to begin the work. But, in some cases, this would be ridiculous since I know the customer, know the building and know the system since I was the person who installed it, and can bring the right equipment and do the work right away. I understand that by completing another Residential AIO contract, including a Schedule of Equipment / Services, along with the 3-day notice, and then beginning work, and sometimes completing the job, that same day, the customer can cancel if they want to, and I would have to return the system to its original condition if they did so. I'm not worried about this as I know my customers quite well and doubt they would cancel within the 3-day period, but I'm thinking of other parties who may subsequently become involved, such as a buyer of my company, or an insurance carrier handling a claim. I can't find a statute that requires a contractor to wait 3-days to begin work if both parties agree to the date that work is to begin. The 3-day notice provides that should a person cancel within 3 business days, the contract is to return any down payment made and the customer is to return any materials delivered to the site. So, is there such a statute? Or, is there any other legal pitfall with starting work before the FTC cooling off period?
My primary concern is when to start the job. I really don't mind using a new contract and new 3-Day Notice. I do that now when doing an upgrade that exceeds $750.00. I would like to limit the number of times I visit the customer's home. I'd like to show up with the contracts prepared, get their signature, and begin work immediately rather than wait 3 business days. Does this somehow impact the 3-Day Notice? Starting work immediately after signing a residential contract could be seen as not allowing the customer sufficient time to ponder the situation, creating a situation whereby the customer would feel pressured and uncomfortable in canceling after the job was started or completed within the cooling off period. I might be overthinking this, as I believe the customer would prefer to be less inconvenienced by having the job done quickly with the least amount of visits to their home. On a job that exceeds $750.00, I email a detailed proposal that describes the work to be done, the equipment that will be used and the total cost, but I like to get the contracts signed in person. So, the customer has ample time to ponder the situation long before I show up with the contracts to do the job.
Thanks,
Anon please
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Response
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Yes you are over-thinking this and the real problem is that you shouldn’t be thinking about it at all. You should join the Concierge Program and let K&K worry about your legal issues. I assume your time will be better spent selling alarm systems and building your alarm business.
Once you have the All in One agreement signed and the Repair Service option selected you can perform the repair services without getting a new contract signed. You don’t really need anything signed though a Completion Certificate is a good idea and so is an invoice if you’re charging for the service, which you would be doing if it’s a per call relationship instead of a RMR Service Plan.
You also have to understand the difference between a repair service and a sale and installation. Without being too technical, a repair means you’re fixing something, a component or material, like a broken wire. If you are adding new components that certainly is not a repair; it’s a new sale and a new All in One is needed.
Replacement of components could fall into a gray area as far as new sale or repair, thus requiring a new contract. Here I think it will depend on whether you are charging for the repair. If it’s included in the Service Plan or it’s clearly a repair that isn’t covered, i.e. a wire that the dog chewed, it’s covered by the Service Option in the already signed All in One. If a component is obsolete and requires replacement, that’s a new sale; so is a repair that is not covered by the Service Plan entailing new components as opposed to a cleaning.
Keep in mind that the Service Plan covers repairs necessitated by ordinary wear and tear; that’s it.
I don’t believe California has a waiver for the 3 day cooling off period. But the penalty is only that you remove your equipment and restore the premises. You express that you aren’t too concerned with this happening, but you’re wondering how your practice may affect a future sale of your accounts. It won’t. As long as you use the 3 day notice the 3 days starts when you give the notice; it’s not stayed or extended just because you started working within the 3 day period. Therefore, by the time you sell your accounts the 3 days will have run for all customers. This however is not a recommended practice and course of conduct. California Consumer Affairs could easily claim that your practice is deceptive because it discourages customers from exercising the right of recession.
I think your entire sign-up practice for your sales needs some re-thinking. You may want to move to electronic contracts, which makes the sign-up a lot easier. You also don’t need to be worrying about impinging on your customer’s rights by not giving enough time to peruse, study and rip apart your contract. California has decided what protection they need and you don’t have to add to it. Waiting the 3 days from when you get the contract signed is the best practice as it complies with the cooling off statute.
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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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