By: Jonathan Byrd On: December 21, 2016 In: Dealer Only Blog Comments: 0

All dealers in California should be aware of Senate Bill 1428. This bill, which will become a law 1/1/2017, requires all security monitoring agreements to provide an Auto-Renewal Clause that each customer must sign or initial on the contract.

If you haven’t updated your contracts, now is the time to do so!

The portion of the bill is stated as such:

“For agreements entered into on or after January 1, 2017, that include an automatic renewal provision renewing the agreement for a period of more than one month, a clear and distinct disclosure shall be included separate from the terms and conditions of the agreement advising the consumer that the agreement he or she is entering into contains an automatic renewal provision. The disclosure shall include the length of time of the renewal term and specify that failure to provide notification of nonrenewal to the licensee, as required in the agreement, will result in the automatic renewal of the agreement.

The consumer shall acknowledge being advised of the automatic renewal provision by signing or initialing the disclosure. The disclosure may be included on the same document as the three-day right to cancel form required by Section 1689.7 of the Civil Code. The automatic renewal provision shall be void and invalid without a separate acknowledgment of the disclosure by the consumer.”

Click here to read a more in-depth article on the changes and what it may mean for your business.