The following is an example of our Rental Agreement with an explanation of each section. If you have any questions please contact one of our stores.
DEFINITIONS: As used in this agreement “you” and “your” mean the person(s) signing this lease as leasee/renter “we” and “our” mean the lessor/owner (the rental company); “property” means the items described in the disclosures; and “lease” means this Rental Purchase Agreement including the disclosures.
This section defines the legal terms used in the Rental Agreement.
TYPE OF TRANSACTION: THIS IS A RENTAL TRANSACTION You may use the property for the term of this lease. At your option, you may renew this lease by making a rental payment in advance for each term you choose to rent the property. The rental rates are shown in the disclosures. Time is of the essence in this lease.
This section qualifies that you may only use the property described in the lease for the term designated in the lease and that you must pay for each term in which you plan to use the items in advance. If you wish to use the property for 1 month you must pay for that month prior to using it. If you want to use it for another month then you pay for that month in advance of using it. The same principle applies to weekly payments.
INTENT: You agree that your intent is to rent rather than purchase the property.
While you may want to eventually purchase the rented property; when signing the lease you are agreeing with this statement which clarifies that you are renting and not purchasing the property. There is no ownership or equity obtained in the property. The only time you gain ownership is when you make the purchase payment.
TITLE AND TAXES: We retain title to the property during this lease and will pay any taxes which may be levied on the property. You do not own the property unless you buy it or acquire ownership as provided by the terms of this lease.
This section clarifies that our company retains ownership of the property. Our company must show the rental property as real property and we pay any required state, county, or city property taxes that may apply to the property. This does not include sales tax which is a different tax issue. This section also clarifies that you do not own the property unless you make the purchase payment which is explained later in this agreement.
FORBIDDEN ACTS: You cannot sell, mortgage, pawn, pledge, encumber, hock or dispose of the property. You cannot move the property from your current residence without our consent. Each of these acts is a breach of this lease.
This section clarifies what is not allowed. Since you do not have any ownership in the property your use is limited to what we (the owners) permit. We do not allow you to sell the property to someone else. We do not allow you to get a loan and use the property as collateral. We do not allow you to withhold the property from us and we do not allow you to get rid of the property. If you are going to move you must tell us prior to moving. It is our right to approve of the location where the merchandise will be located. If you are moving outside of our market area you will be required to either purchase or return the property. We may require you to allow us to move certain property to ensure the safety and condition of the property.
OUR RIGHTS TO TAKE POSSESSION: If you do not renew this lease or if you breach this lease, we have the right to possession of the property. If that happens, you must return the property to us or allow us to take possession of it. If you fail or refuse to comply with this requirement, you agree to pay our costs incurred in taking possession of the property including reasonable attorney’s fees.
This section defines that our company has the right to the possession of our property if you breach the lease or fail to renew the lease by paying for the term in which you are using the property. If you fail to allow us to have the property back you will be required to pay our costs for retrieving it. This includes court costs, attorney fees, collection costs, and other fees as warranted.
ASSIGNMENT: We may sell, transfer, or assign this lease without notice to you.
This section gives our company the right to sell our company or our rental agreements to another entity.
NOTICE TO RENTER: Do not sign this lease before you read it or if it contains any blank spaces. You are entitled to an exact copy of the Rental Purchase Agreement you sign. Keep it to protect your legal rights.
As described above you are notified that it is your legal right to read the agreement before you sign it and you are entitled to a copy of the agreement.
RENTAL TERM: ______. Rental payments are due at the beginning of each term that you choose to rent the property. There are no refunds if you choose to return the property before the end of the term.
The rental term you are starting with will be listed in the space shown. Monthly, Weekly, Bi-Weekly. You may change the term at any time by paying for that term on your next payment. As explained you are obligated to pay in advance for the time you are going to use the property. You are not allowed to use the property first and then pay for the time you have it. You are allowed to return the rental property at any time but if there is time remaining on the term you are not provided with a refund.
DESCRIPTION OF PROPERTY AND RENTAL RATES: Unit # – Category/Description – Serial # – Condition – Monthly Rent – Weekly Rent
You will be provided the above information for each item included in that lease. The condition will specify if the property is new or pre-leased.
INITIAL RENTAL PAYMENT. Your initial rental payment will include the following charges: Rent – Delivery Charge – Processing Fee – State Tax – Central Advantage – Total
There may be fees on your first payment that are not a part of your regular payment. Those fees if there are any are described in this section.
OTHER CHARGES: In-House Collection – Central Advantage Fee – Late Charge
This section lists any other charges that might be charged in addition to rent and tax during the course of the agreement. The In-House Collection fee is the amount charged if our company attempts to collect the payment at your house because you did not make your renewal payment. The Central Advantage Fee is the amount charged on each payment to cover the additional services provided in addition to the standard rental services listed in this agreement. The Late Charge fee is the amount charged to renew your agreement when you have not paid for the term in which you are currently using the property.
TOTAL COST. If you choose to rent to own you must renew this lease for the following number of months or weeks. (The Total Cost includes all costs included in the Initial Rental Payment but does not include other charges you may incur such as late payment, default, pickup and reinstatement fees, whcih fees are seperately disclosed): # of Months X payment per month for a total cost of Y or # of Weeks X payment per week for a total cost of Y. You will not own the property until you have made the total payments necessary to acquire ownership, or purchase it for cash sooner.
This section defines the minimum number of rental payments you must make to gain ownership. Your last rental payment becomes your purchase payment. This section in effect provides you a pre-determined amount in which we will sell you the property without requring additional negotiation to determine a purchase price.
OUR CASH PRICE FOR THIS PROPERTY IS $X
This is the amount for which we agree to sell the property.
EARLY PURCHASE OPTION. If you wish to purchase the rental property you may do so at any time by the payment of ___% of the remaining Total Cost calculated at that time. (Exception Last month).
This provides you the mathmatical computation in which we determine what the purchase price will be should you decide to purchase the property before the end of the agreement. Each time you make a payment the total cost is reduced by that amount. If you wish to purchase early you simply pay ___% of the amount that is left at that time. This provides a couple of mathmatical elements in our rental program. Our cash price is ___% of the rent X # of terms. This calculation allows you to use the percent listed of the rent you pay to reduce the amount required to gain ownership.
RISK OF LOSS. You are responsible for the fair market value of the property if, and as of the time, it is lost, stolen, damaged or destroyed. The maximum amount of your liability is the cash price of the property listed above.
This section places the responsibly to safe guard the property onto you. It determines what amount you will be responsible for should any of the above happen.
REINSTATEMENT. If this lease expires you may reinstate by paying any rental payments and other charges that are due. You may reinstate it within 5 days of the expiration date if it is a monthly lease or 2 days if it is weekly. If you return the property upon request, within this period, you may reinstate within 21 days of returning the property unless you have paid two-thirds or more of the total cost which will extend this period to 45 days.
This section provides you a limited opportunity to reinstate your agreement should you not pay for the next term in advance. If you do not pay in advance you may reinstate by making your payment and any other charges such as late fees and In-House Collection fees. If you are renting monthly you have 5 days within which to reinstate the agreement. If you are renting weekly you have 2 days withing which to reinstate the agreement. This is not a grace period and does not mean that you are not obligated to pay before the next term begins. Rather it is a legal means for you to reinstate your agreement should you not pay in advance. If you return the property upon request, within this period (5 days monthly or 2 days weekly) you may reinstate within 21 days of returning the property or 45 days if you have paid at least two thirds of the total to gain ownership. The law requires you to return the property within this time frame upon our request to qualify. It is our option to provide you additional options regarding reinstating your agreement. However, you must be aware that since this is a rental it is expected that your payment will be in advance of the upcoming term and that the law does not provide you much time to reinstate your agreement should you neglect to pay in advance.
WARRANTY AND MAINTENANCE. If you acquire ownership of the property, the manufacturer’s warranty will be given to you if the warranty is still in effect and we are allowed to give it to you. We will maintain the property in good working order as long as you rent it.
This section requires that we make sure that you have a working product while renting and if you purchase the property that we give you any remaining warranties.
TERMINATION. You may terminate this agreement, without penalty, by voluntarily surrendering or returning the property in good repair, reasonable wear and tear excepted, at the end of any lease term along with any past due rental payments.
This section provides you the legal right to stop making payments by returning the property prior to the next term. Additional charges may result if you do not return the property voluntarily and did not pay for the rental term in advance or if the property was damaged.
