Personal Property Lease Agreement
Renting a personal item can be a beneficial step towards conscious consumption. We only need some items for a short time or, for instance, once a season, so it may be more profitable to take them for a while rather than buying them at full price. Or, when you are undecided whether you need something for your full use or if the trial period is enough—you can rent a neighbor’s lawn mower instead of buying your own.
Of course, it will be beneficial for both parties if such personal property lease arrangements are documented in the contract. For these purposes, you can use the personal property lease discussed in our article below.
What Is a Personal Property Lease Agreement?
This is a type of agreement that is used between two parties to a lease of a property. The contract contains all the conditions and details of your agreements and the subject of the transaction in writing. This is useful for both parties (lessor and lessee) as it eliminates misunderstandings or disputes during the lease term. A lessor is someone who leases out personal property for a specified period and receives the agreed compensation in return. The lessee is the party that receives this personal property for a fee.
Although most people think leases are made up for renting cars or houses, smaller and more significant items can be rented, too—a bike for the weekend, jewelry for a big event, a Playstation for the holidays. If you do not need the item on an ongoing basis, you may as well lease it from your friends or special companies.
When to Use a Personal Property Lease Agreement?
Have there been times in your life when you loaned something to your friends, but they did not return it or spoilt the thing? For sure, yes. Such issues often result in quarrels and resentments. It’s not a big deal for a lost book or a T-shirt, but it can also be a more expensive and valuable item, like a gardening appliance or jewelry.
To avoid such unpleasant situations, a personal property lease is drawn up. The document contains the details of your agreements and acts as a guarantor of fulfilling the conditions. When you document the deal, you are already making it more serious. Paper encourages good faith between the parties.
What Should Be Included in a Personal Property Lease Agreement?
You can write an agreement in any form, but you need to include the required components of this document. These are:
- The parties to the transaction. The lessor and the lessee usually indicate their full names, addresses, and phone numbers.
- The subject of the transaction. The thing or object given for rent and its description (state of equipment, model, characteristics, photo) is detailed.
- The lease term.
- Price of the rental and payment terms.
- Other conditions such as property delivery or return.
- Conditions for indemnification in case of damage or loss.
- The parties’ signatures.
In addition to these, you can include other conditions in the contract such as inspection by the lessee/lessor, the purpose of using the item, insurance, actions in case of breakage or loss, warranties, options to purchase, and others. The more provisions you include, the fewer misunderstandings and showdowns await you in controversial cases. Sometimes, however, a more concise agreement is enough.
How Does a Personal Property Lease Work?
In the United States, this type of contract is governed not only by federal law but also by the laws of the individual states where the transaction is being conducted. Such laws help to understand the principles of concluding agreements and achieve a legitimate understanding between the parties.
Steps to Conclude a Personal Property Lease Agreement
To create a this type of lease contract, you need to follow some simple guidelines.
Negotiate the Terms
First of all, you need to get a verbal assurance that the second party is ready to provide you with a particular property for the desired period. If you get consent, you can negotiate terms such as the rental price and provisions in case of damage or loss of the item. The negotiation process depends entirely on you. Be mutually polite and respectful.
Fill in the Details of the Participants
Once you have reached a verbal agreement, start filling out a written document. First of all, fill in the details of the parties to the transaction—the lessor and the lessee. Include your full names, addresses, and contact details.
Describe the Property
Describe the subject of the transaction you want to lease. Please specify the model and identifying characteristics. You can even attach property photos. Be sure to write down the condition of the item, and indicate if there are any defects.
Formulate Key Terms
The contract must include the following conditions:
- Rental period
- Rent amount
- Payment schedule
- Cash value of the property
Add Additional Conditions
Often, the parties also agree on additional conditions, such as actions in case of loss or damage to the property or late payments. Indicate everything that you think is necessary.
Check the Agreement
Print the document in two copies so that each party can keep one and use it if necessary. Make sure you agree with all provisions.
Certify the Document
Usually, only two parties to the agreement put their signatures, but you can also have witnesses if you wish. Put the required signatures and keep the document in a secure place. The document should be kept for the entire duration of the lease and some time after.