Lavan:
Thanks for your input :). I have tested it with multimeter and confirm its a reed switch. If the magnet is near to it, I can see the continuity in the multimeter. Now the question is, are there any chances that it may go defective or malfunction at higher speeds?
Not likely, if good at static test then should be fine at some speed. However keep in mind that all electro-mechanical relays suffer from some duration of 'contact bounce' so there is always going to be an upper limit to how fast one can control a relay and still have proper reliable contact response. Reed relays are however among the fastest of all electro-mechanical relays and should have contact bounce of only some microseconds.
Lefty