Alarm system contracts in California: what the Alarm Company Act requires

Who may install and monitor alarms, what the written agreement must include, auto-renewal and down-payment rules, misleading claims and your right to cancel.

A home or business alarm system usually comes with a contract that runs for years: equipment, installation, monitoring and often an automatic renewal. California's Alarm Company Act (Business and Professions Code sections 7590 to 7599.80) regulates who may sell, install and monitor alarms and what the written agreement must say. Read this before you sign.

Only licensed alarm companies may install, service or monitor

Section 7592 says no person may act as an alarm company operator in California without a valid alarm company operator license from the Bureau of Security and Investigative Services, unless exempt. Under section 7590.2 that covers anyone who, for any consideration, installs, maintains, alters, sells on premises, monitors or services alarm systems, including supplementary smoke detectors connected to them, or who responds to alarms. The people who knock on your door or install the panel are "alarm agents" and must be registered by the bureau as employees of the licensed company. Fire protection systems as defined in the California Fire Code are not "alarm systems" under the Act.

What the written agreement must contain

Section 7599.54 requires every agreement, including lease, monitoring and service agreements and all labor and materials for an installation, to be in writing, and every amendment to it as well. Each initial agreement must include, among other things:

• the company's name, business address, business phone and license number, and the name and registration number of the alarm agent who sold it;
• the approximate start and completion dates;
• a description of the work, the materials and the agreed price;
• a disclosure that alarm company operators are licensed and regulated by the Bureau of Security and Investigative Services, with the bureau's contact information;
• a description of the system's major components and of the services after installation, including any monitoring or response;
• a statement that the company will thoroughly instruct you in using the system once it is installed; and
• a copy of the written agreement signed by the company, furnished to you before any work is done.

Automatic renewal and down payments

For residential agreements entered into on or after January 1, 2017 that renew automatically for a period longer than one month, the agreement must include a clear and distinct disclosure, separate from the terms and conditions, that it contains an automatic renewal provision, how long the renewal term is, and that failing to give notice will renew it (section 7599.54(a)(9)). Put the cancellation window in your calendar the day you sign.

For residential sales and lease agreements whose total cost over the term exceeds $250, the agreement must include a payment schedule tied to the work, and any down payment may not exceed $1,000 or 10 percent of the contract price, excluding finance charges, whichever is less. The company may not receive payment in excess of 100 percent of the value of the work performed at any time, apart from that down payment, and the agreement must include a notice-to-owner statement explaining California's mechanics lien law.

Misleading claims are prohibited

Section 7599.55 forbids untrue or misleading statements, and gives two examples. A company may not say a system is "UL approved or listed" unless the entire system, not just a component, is UL approved or listed, and may not say a system is insurance approved, police approved or approved by the Department of Defense unless that approval has been obtained in writing.

Your right to cancel a contract signed at home

Door-to-door alarm sales are common. Under Civil Code section 1689.6, you can cancel a home solicitation contract until midnight of the third business day after you sign, or the fifth business day if you are a senior citizen, by written notice to the address or email address in the agreement. For a personal emergency response unit, the pendant-style device that summons help, the period is seven business days, except where the unit is installed as part of a home security alarm system covered by the Alarm Company Act with two or more stationary protective devices.

Monitoring, response and locks

The definition of alarm company operator in section 7590.2 includes monitoring alarm systems and responding to them, so a central station that monitors California customers and a company that sends someone when your alarm trips are covered too. Ask your installer whether it monitors the system itself or contracts with a separate central station, and confirm that company's license as well. Alarm companies may also do limited lock work: under section 7590.2(c), a licensee is exempt from the locksmith licensing rules for work on electronic locks or access control devices controlled by an alarm system, when done together with alarm installation or service. Purely mechanical lock work still needs a licensed locksmith company.

How to check an alarm company

1. Find the company here. Each California listing shows the BSIS alarm company operator license number, whether it is a branch office, and when it was first licensed and expires.
2. Confirm the license on the DCA License Search (Bureau of Security and Investigative Services), which also shows any disciplinary action.
3. Check that the license number on the agreement matches, and look up the alarm agent's registration number too.
4. Ask who actually monitors the system. Many installers contract with a separate central station; ask for its name.

Before you sign

• Get the total cost over the full term, not just the monthly price, and ask what happens to the equipment if you cancel or move.
• Find the automatic-renewal disclosure and the cancellation notice period.
• Ask whether your local police or fire department charges for false alarms or requires an alarm permit, and who pays.
• Keep the signed agreement and the bureau disclosure. If something goes wrong, BSIS accepts complaints online.

Updated 2026-10-16.

General information only, current as of the date above. The information on Security Company Check is not a recommendation or a guarantee of anyone's work. A license record shows registration status on the date shown, not workmanship, insurance coverage at the time of your job, or suitability for your project. Confirm license, insurance and permits directly before you hire. Rules and programs change; check the official sources linked in this guide.