The Legal Side: Fines for Central Stations for Customers without Permits

Fines for central stations reporting alarms for subscribers without alarm permits. That's an idea the legislature of Nassau County, N.Y., tossed around at a session last week. Fortunately members of Long Island Alarm Association attended, spoke against the proposal and the proposal was defeated. Central stations of course don't install the alarm systems and in most cases have contact with the subscriber only when one of its operators calls to confirm or report an alarm signal. So why fine the central station?

The real agenda is the raising of revenues. Under the guise of exercising its police powers, necessary for the protection of the public, governmental entities enact permit requirements and false alarm fines. Contesting the government's right to impose permits and fines was lost long ago, but fines that are for the most part beyond the control of the central station strike me as patently unfair. Enforcement may therefore be challenged.

It's the central station that makes the call to the police, fire department or emergency services, but what could be the justification to fine the central station, and what options would a central station have?

The central station could certainly refuse to dispatch police if it has no record of a required permit. Interestingly enough, one could argue that the police also could choose to ignore a call if it cannot ascertain a permit. I suspect the police would be risking at least bad publicity if not liability if a department ignored an alarm call just because there was no permit. Why then does the legislature put the central station in the position of ignoring the signal or risking a fine? It's not fair and the alarm industry should not stand for it.

Permits can serve a useful purpose if designed properly. Those registering for permits can be required to provide certain information that would be useful to those responding to alarms, such as address, access, contact persons, and other information about the premises and those in the premises. Permits also can be useful if end users are required to have the equipment installed, serviced and checked by a licensed alarm company. Renewal of permits could require inspection of the alarm by a licensed alarm company. All this of course would help the alarm industry, end users and the police.

The installing alarm company is in the best position to advise the end user what permits are required. We are not at the point where every alarm customer should know that one or more permits are required for an alarm system. I don't recall a car dealer reminding me that I need a valid driver's license when I buy a car, but alarm permits aren't that ubiquitous. So installing alarm companies should be required to advise the end user that permits are required, and a permit should require that a licensed alarm company certify that the system was properly installed.

Renewal permits should also require certification from a licensed alarm company that the system was inspected, but the onus of getting the renewal permit should rest with the end user.

It's the end user who should be fined for no permits once properly notified by the installing company that permits are required. Failure to provide the notice should result in a fine to the installer.

But it's easier to fine the central station and there's probably less political fallout. End users are already taxed beyond comprehension and this would just be more to complain about. Plus, for the governing bodies, it's simply easier to look at a handful of central stations instead of establishing contact with numerous alarm installing firms.

If these kinds of laws go into effect, a central station will have to risk the fines or refuse to provide notice if there is no permit. The hard choice is then risking sizable fines or risk losing many subscribers and dealers.

Can the central station pass the cost of the fines to the installers or subscribers? The monitoring contracts can provide for that. I just changed the monitoring contracts, three-party contracts and the installer contracts that I write in my law office to provide for that. The installer and subscribers must indemnify the central station if there are permit or false alarm fines. Of course, whether these new indemnity provisions will hold up in court remains to be seen. The disclaimer notice should disclose the permit requirements.

Nassau County can't be the only jurisdiction considering these permits and fines, and such requirements may already be in place. Central stations need to update their installer contracts and three-party contracts. Dealers need to update the monitoring contracts and use the disclaimer notice.

About the author: Ken Kirschenbaum, Esq., is a New York-licensed lawyer practicing with Kirschenbaum & Kirschenbaum PC, a Long Island legal firm with a rich history of assisting clients in security and alarm related matters. Ken can be contacted via email at ken@kirschenbaumesq.com. His website, www.kirschenbaumesq.com, features a great supply of legal information and court rulings relevant to the security industry. You can also sign up for Ken's discussion list from his homepage. He publishes alarm contracts on his site at alarmcontracts.com.

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