Equipment rental agreement

Renting a machine to someone, or renting one yourself? Fill in the machine, dates, rate and deposit, then print a clean agreement for both sides to sign.

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What it is

An equipment rental agreement sets out the terms for one party to use another's machine for a set time, at a set rate. It says who pays if the machine is damaged, who carries insurance, and when it has to come back.

When you need one

Lending or renting a skid steer, excavator, trailer or truck to another contractor.
Renting a machine from a neighbor or another business.
Testing a machine for a while before you decide to buy it.

What to include

The serial number or VIN, and hours or miles at the start and at return.
A replacement value, so there is no argument later about what the machine was worth.
Rate, deposit and any limit on hours or miles.
Proof of insurance before the machine leaves. It also helps to fill in a condition report at the start and the end.

What the form asks for

Owner: Owner name; Street address; City; State; ZIP; Phone.
Renter: Renter name; Street address; City; State; ZIP; Phone.
The equipment: Year; Make; Model; Serial number or VIN; Hours or miles at start; Replacement value; Where it will be used.
Dates and money: Start date; Return date; Rental rate; Per; Security deposit; Limit on hours or miles.
Who covers what: Fuel; Delivery and pickup; State whose law applies.

The wording on the printed document

Rent. The Renter pays ________ per ________ from the start date until the equipment is returned. Keeping the equipment past the return date costs the same rate until it is back.

Deposit. The Owner holds a deposit of ________, and returns it after the equipment comes back, less unpaid rent and the cost of any damage.

Use. Only trained, licensed operators may run the equipment, and only for its intended work, at the location above and within any limit stated here: ________. The Renter may not sublease it or take it elsewhere without the Owner's written approval.

Condition and care. The Renter accepts the equipment in the condition it was inspected at the start. The Renter handles daily checks and fluids and stops using it if a problem shows up, then tells the Owner right away. Fuel: ________. Delivery and pickup: ________.

Damage and loss. The Renter is responsible for loss, theft and damage beyond normal wear during the rental, up to the replacement value above.

Insurance. The Renter keeps general liability and physical damage insurance on the equipment during the rental, names the Owner on it, and gives proof before the start date.

Responsibility. The Renter is responsible for claims arising from the use of the equipment during the rental, and will defend and hold the Owner harmless from them, except to the extent the Owner caused them, as far as the law allows.

Ownership and return. The Owner keeps title at all times. The Renter returns the equipment clean, on time, and in the same condition apart from normal wear. If the Renter breaks this agreement, the Owner may take the equipment back.

Whole agreement. This is the whole agreement. Changes must be in writing and signed by both. The laws of ________ apply.

This is a general template, not legal advice. Check with an attorney for your situation.

Common questions

Who is responsible if the machine breaks?
Under this form the renter handles daily care and pays for damage beyond normal wear, and stops and calls the owner if a problem appears. Change it if you agreed something else. Whoever you make responsible, put it in writing.

What insurance should the renter carry?
Commonly general liability, plus physical damage coverage on the rented machine, with the owner named on the policy. Ask your insurance agent what yours needs before anyone starts work.

Is a rental the same as a lease?
Often a rental is short, by the day or the month, and the machine comes back. A lease usually runs for years and may end with an option to buy. For one with a buyout, see our lease-purchase checklist.

Do I have to charge sales tax on a rental?
In many states, rentals of equipment are taxable, and the rules differ. Ask your accountant or state tax agency if you rent out machines regularly.

Can I add an operator?
This form is for the machine alone. Renting with an operator raises different questions about insurance and who supervises the work, so have those terms written up separately.

Buying equipment and need financing? Apply here.