Home Security Contract Audit Checklist

A 27-point checklist that surfaces every clause in a security contract that quietly costs you money — auto-renewal, ETF, escalators, equipment ownership.

A 27-Point Pre-Sign Walkthrough from SecurityCompass HQ

Version: 2026.05 Free, no paywall, ungated reuse. Republish with attribution to https://www.securitycompasshq.com.

How to use this checklist

Open your security-system contract (or the proposal you've been given) and walk through each item below. For every "yes" you can't confirm in writing, mark it as a follow-up question for the salesperson before you sign.

If you can't get a clear written answer to a single high-priority item, that is itself a red flag.

A scored worksheet version of this checklist is available at https://tools.securitycompasshq.com/methodology/contract-upload — you can paste your contract there and get a plain-English breakdown automatically.

SECTION 1 — Contract length and renewal (high priority)

1. What is the exact initial contract term, in months? Anything over 36 months is unusual. 60-month contracts exist and are the most common source of "I'm trapped" stories.

2. Does the contract auto-renew? If yes, for how long, and what is the cancellation notice window? (30 days, 60 days, 90 days?)

3. What is the exact method to cancel? Phone-only? Certified mail? In-app? Method matters — some brands require certified mail to a specific PO box, and any other method is treated as no notice given.

4. Is there a "grace period" or FTC cooling-off window? For door-to-door sales in the US, federal law gives you 3 business days to rescind. Other situations vary by state.

SECTION 2 — Money (high priority)

5. What is the monthly monitoring rate, written in dollars? Not "starting at" — the actual dollar amount on YOUR contract.

6. Is there a monthly rate escalator? Look for phrases like "annual increase," "CPI adjustment," "subject to change." A 3% annual escalator on a $50/mo plan compounds to ~$58/mo by year 5.

7. What is the early termination fee (ETF)? The two common formulas are: (a) 75-100% of remaining contract value, or (b) a fixed dollar amount. Get it in writing. Use https://tools.securitycompasshq.com/etf-calculator for the math.

8. Is there an activation or setup fee? $0-$300 is the typical range. Confirm the exact amount.

9. Are there permit fees or false-alarm fees? Some municipalities require an alarm permit ($25-$150). Some monitoring contracts also pass through false-alarm dispatch fees ($50-$400 per incident).

10. What happens to the rate after a promotional period ends? "$19.99/mo for the first 12 months" usually means a much higher rate kicks in afterwards.

SECTION 3 — Equipment (high priority)

11. Do you OWN the equipment, or are you LEASING it? This is the single most-misunderstood line in security contracts. "Free equipment" is often financed equipment that you lose if you cancel.

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