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Your consent is needed for assignment and assumption agreement

August 31,  2021
Your consent is needed for assignment and assumption agreement
          We have a client that recently sold their apartment complex of several buildings, all having fire alarms that we installed, monitor and inspect. We are being told that the new owner has assumed our contract through the sale of the property because we had an ALL IN ONE 10 year agreement with the old owner which is about 3 years old now.       Can we accept this as being official or do we need to get new agreements, and before you answer, that let me explain a little further. Our hunch is that if we approach the new owner saying we need new agreements we think they may shop us around to see if they can get better pricing and not stick to the original contract terms, so this is why we are having some hesitancy. From what we were told they only stuck with us because we had a long term contract with the previous owner. We have several other properties with the old owner so we are definitely not going to pursue the remaining balance.
           Please allow me to remain,
          There is no need for you to get a new contract from the new owner.  Initially I’ll point out that you can hold your original customer to the contract.  You have a great reason not to, actually two reasons:  1) it is a customer at other locations and you don’t want to antagonize them and potentially lose their business, and 2) they found you a new customer and arranged for the new customer to take over the contract.
          I can see that you assume the new customer took over the contract for some reason other than it had to.  Chances are that the original customer knew it was under contract and required the new owner to accept an Assignment and Assumption of the All in One Fire Alarm Contract.  So the new owner didn’t do you a favor; nor did it do the original owner a favor; taking over the contract may very well have been a requirement in the contract to acquire the contract.  [though I am one of the few attorneys who remembers to ask a client selling property if they are party to an alarm contract that needs to be dealt with when the property is sold].
          But you have over-looked the same thing the original customer may not have noticed; the All in One is not assignable by the customer.  In this case you do want to approve the assignment; you’re happy with the new customer, even if the new customer isn’t happy with you.  But you should formalize the assignment.  The new customer doesn’t have to sign a new contract, but it does have to sign an Assignment and Assumption Agreement.  That’s an assignment from the original customer to the new customer that you consent to; it also includes an assumption of all obligations and performance in the All in One by the new customer.  There may very well be an Assignment signed by the old and new customer at the time the deed to the property was transferred. 
          If you don’t want to bother your old customer for the assignment you can get an Acknowledgment of the Assignment and Assumption from the new customer; sort of written confirmation that the new customer has assumed and will perform under the All in One. 
          What you should not do is sit back and not request the Assignment and Assumption because if there is a need to rely on the contract you don’t want to first have to establish that the new customer did in fact assume that contract.  While making payment may be enough to prove that, it may not and you don’t want to wait until it’s too late to find out.

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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