What is a rental agreement?

A rental agreement is the contract between a rental company and its customer for a unit: what is rented, where it goes, the rate and billing cycle, who is responsible for damage, and how the rental ends. A signed agreement is what the company relies on when a payment, a return or a repair is disputed.

The nvisin tool built around this: Rental Manager.

What it usually includes

  • The unit: type, unit number or serial, condition at delivery, and any accessories.
  • The site: delivery address, access, and who has to be there.
  • Price and billing: rate, billing cycle, delivery and pickup charges, deposit, payment method and late fees.
  • Responsibility: damage, loss, theft, a damage waiver if offered, and proof of insurance if not.
  • Use: what the unit can't be used for, who may move it, and the weight or load limits.
  • Ending the rental: notice to call it off-rent, when the rent stops, and the condition it must be returned in.
  • Signatures, ideally with initials beside the clauses that cause the most disputes.

How it is used

The agreement is signed before delivery, kept with the rental, and pulled out whenever something goes wrong. Many rental companies now send a link the customer signs on their phone, with photo ID and the key clauses initialled, and keep the signed PDF with the rental record.

Worked example

A customer rents a portable storage unit for a home renovation. Clause 6 says rent stops on the day the customer calls the unit off, provided it is empty and accessible. They call on the 3rd, but the driveway is blocked by a skip until the 9th. Because the condition is written down and initialled, the company bills to the 9th, and the customer has already agreed to it.

Common mistakes

  • One agreement for everything. A tent for a weekend and an office trailer for a year need different clauses.
  • Terms the customer never saw. Clauses on the back of a form, or on a website only, are hard to rely on.
  • No ID on file. When a unit goes missing, the name on the agreement has to be a real person.
  • Not keeping the signed copy with the rental. If staff can't find it in a minute, it might as well not exist.

Related terms

  • Damage waiver: A damage waiver is an optional charge, usually a percentage of the rent, that a rental company adds in exchange for limiting what the customer pays if the unit is accidentally damaged.
  • Off-rent (off-hire): Off-rent, called off-hire in the UK, Australia and parts of Canada, is the point at which a customer tells the rental company they're finished with a unit and the rent stops.
  • Rental billing cycle: A rental billing cycle is the period a rental is charged for at a time, such as a day, a week, a 28-day period or a calendar month, and the date each charge falls due.

Further reading