If you are renting, lending or borrowing personal property, like a piece of equipment or a vehicle, it is often a good idea to put the agreement in writing. If you’re the owner, you want to be clear with the person using the property about when it is due back, what type of care they need to take with it, and how much they owe you, if anything, for the usage. If you are the renter or borrower, you can also benefit from such an agreement, for example by noting pre-existing damage to the item so you are not held responsible.
Rent/lend agreements for real estate — for example, leasing or subletting an apartment — are more complicated and potentially subject to greater regulation than rent/lend agreements for personal property. Here we focus on rent/lend agreements for personal property, not real estate.
Components of a Typical Rent/Lend Agreement for Personal Property
Some components of a typical rent/lend agreement are:
- Party Names. The agreement specifies the names of the parties and possibly also includes contact information for them.
- Description of the Property Involved. A detailed description of the item being rented and its condition and identifying characteristics, including (if applicable) an identification or serial number, and any damage or flaws.
- Restrictions on Use. Any restrictions that the owner wishes to place on how the property is used.
- Fees. How much is being charged, and what the basis is for calculating the fees (for example, a flat fee or a daily rate), when payments are due, and any other terms relevant to financing or payment.
- Delivery and Return Date. When the item must be delivered (if applicable) and returned.
- Delivery and Return Location. Where an item will be delivered to (if applicable) and to where it must be returned.
- Property Value, Event of Loss. The value of the property and what the renter will owe the owner if the property is lost or damaged.
- Limitation of Owner’s Liability. Sometimes the agreement will address (and attempt to limit) the owner’s exposure in the event of harm resulting from the renter’s use of the property. The owner may want for the renter to release the owner from any such claims against the owner, and to indemnify the owner against claims from third parties. Another means of limiting the owner’s exposure in the agreement is requiring that the renter be insured against the types of damages that could result from the renter’s use of the property.