How Security Dealers Can Avoid Automatic Renewal Altercations
Security dealers need to arm themselves with the requisite automatic renewal aptitude.
Length of term and automatic renewal options are often items of negotiation for alarm system and monitored services contracts. When subscribers object to automatic renewal, even month to month, you should be prepared with answers.
Burglar alarm companies have evolved into life-safety professionals. Sure, not every alarm system involves life safety equally. An intrusion system in a vacant building may not have the same life-safety issues as a fire alarm system, smoke and CO detectors, environmental alarms that detect escaping poisons, etc. So the simple answer to the subscriber who balks at an automatic renewal is, without the automatic continuation of the contractual relationship to provide your service that service is going to abruptly stop when the contract expires.
Your subscriber may demand that you provide notice of the upcoming expiration. But why should you be put to that added chore and added responsibility? What if the notice is not received or acted upon by the subscriber? Will another notice be required by this subscriber that service is going to terminate and yet another notice that service has terminated?
See if this difficult subscriber is willing to give you the notice that the contract is expiring and they want to renew it. Remind them to consider that without that notice the service stops abruptly without further notice. You can end up with a building with no fire protection; a life-supporting device without an alarm monitor; a building where poisonous contaminants may escape into the air. Why, so your keen negotiating subscriber can be assured of a one year or less monitoring deal? Tell them to find someone else.
Yes, your contract can certainly be modified so that some events need to take place before termination, and that the protective provisions will survive the expiration of the contract in the event your services continue. That terminology can be drafted, but why do you want to go to that expense? It’s going to cost at least $500 and perhaps a lot more.
Many states have laws that address automatic renewal provisions in consumer and business-to-business contracts. Some permit such provisions but impose strict notice requirements in order to be enforceable. You need to know what is required in your state and you need to comply with the notice provision. Alternatively, have the contract renew month to month rather than a longer term because every automatic renewal statute exempts month-to-month renewal from notice provisions. New York requires that notice within a 15-day window, served personally or by certified mail. No one complies. Florida has a 30-day window for notice. You can check other state automatic renewal laws at kirschenbaumesq.com/page/alarm-law-issues.
Failure to comply with automatic renewal statutes will jeopardize enforcement of the contract, potentially expose you to regulatory investigation and punishment, and reduce the value of your subscriber account base. These are all very good reasons to comply with the automatic renewal laws. Keep in mind that even if your state doesn’t have a statute now, that could change, and it’s likely that a new statute will exempt month-to-month renewal.
I get involved in negotiations with subscribers and their attorneys several times a week. I have heard it all and I don’t think the month-to-month renewal has ever been an issue. You need to insist on it.
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