An Equipment Rental Agreement is a document that an equipment provider and renter can enter when one or more pieces of equipment are being rented.
Equipment Rental Agreements can be used in most circumstances where a physical good (other than real estate) is being rented out. Through an Equipment Rental Agreement, a provider and renter can outline the terms and conditions of the rental of the equipment.
This Equipment Rental Agreement is not designed to be used for renting real estate (such as a house, apartment or office). This Equipment Rental Agreement should only be used in the case of physical goods being rented out.
This Equipment Rental Agreement is only for use with physical goods (not real estate).
On the other hand, a Commercial Lease Agreement (Non Retail) is designed for use with commercial real estate.
No, it is not mandatory to have a written Equipment Rental Agreement. However, it is highly recommended to have one, as a written agreement can help ensure that both parties are on the same page regarding the transaction. It also protects both parties' interests in case there is some kind of dispute or disagreement regarding the rental.
Companies or individual people can enter an Equipment Rental Agreement.
To enter into an Equipment Rental Agreement, a person should be aged 18 or older and should have the mental capacity to understand what they are doing.
There is no set duration for an Equipment Rental Agreement. However, for leases that exceed two years, or if the equipment is being leased for an indefinite period (which ends up exceeding two years), then the owner of the equipment is required to register their interest on the Personal Property Securities Register. This can help them to recover the equipment from the renter if there is a dispute or if the renter declares bankruptcy and can also restrict the renter from selling the equipment.
Once this agreement is ready, the parties should review it to make sure they are happy with it, and then sign it and date it.
The parties should then save a copy of the signed version for their own records.
If the lease exceeds two years, or if the lease is for an indefinite period (which ends up exceeding two years), then the owner of the equipment is required to register their interest on the Personal Property Securities Register.
For leases that are under two years, there is no requirement to register the lease. However, the owner of the equipment may choose to register their interest on the Personal Property Securities Register anyway. This can help them to recover the equipment from the renter if there is a dispute or if the renter declares bankruptcy. It can also restrict the renter from selling the equipment.
For leases that are for more than two years, or if the equipment is being leased for an indefinite period (which ends up exceeding two years), then it is mandatory to register the owner's interest on the Personal Property Securities Register.
No, witnesses are not mandatory for an Equipment Rental Agreement, but they are useful for evidentiary purposes. If there is ever a dispute over the Equipment Rental Agreement, witnesses can help to prove that each party's signature is valid.
Witnesses should be independent adults (aged over 18), who have the mental capacity to understand what they are doing. They should not be related to one of the parties.
An Equipment Rental Agreement should contain provisions about the basic logistics of the rental, such as:
Equipment Rental Agreements in Australia are generally subject to principles of contract law.
If the equipment is being rented by a business, to an individual consumer, then the Australian Consumer Law which is set out in the Competition and Consumer Act 2010 (Commonwealth), may also be relevant.
If the owner is going to register their interest on the Personal Property Securities Register, then the Personal Property Securities Act 2009 (Commonwealth) may also apply.
If the parties need any background information regarding equipment rentals and relevant laws that they may need to consider, the Australian Government's Business website provides some helpful guidance.
Further information is also available from the Australian Financial Security Authority. If in doubt, seek legal advice.
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Equipment Rental Agreement - sample template