# What to include in a rental agreement



## FACTplayers (Oct 20, 2011)

I've been toying with the idea of creating a formal rental agreement for my audio equipment. What do you guys think I should include in the agreement?

As of currently, I have that the party renting is responsible to pay the agreed upon maintenance fee along with all apparent damage done to any equipment during the duration of possession. 

Basically, I want my equipment protected. The theatre is in a public school, and in the past microphones have gone "missing", so the school has opted not to buy equipment anymore. I have no problem buying the equipment and renting it out; I just want something in writing to cover myself.


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## mstaylor (Oct 21, 2011)

What is a maintenance fee? I can see paying for replacement of missing gear, replacement or repair of damaged gear. Where it gets interesting is normal equipment failures, including broken mic cables and similar.


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## cpf (Oct 21, 2011)

Make sure to include some wording on the guarantee of functionality, or lack thereof, of the equipment. Do you just guarantee that it will be functional at the start of the rental period, or will you perform repairs as needed during the rental? What's the policy on 3rd party/DIY fixes?


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## FACTplayers (Oct 21, 2011)

mstaylor said:


> What is a maintenance fee? I can see paying for replacement of missing gear, replacement or repair of damaged gear. Where it gets interesting is normal equipment failures, including broken mic cables and similar.


 
A maintenance fee is a nominal fee I am going to charge for all rentals. It will be put into a fund which will cover the normal wear and tear of the equipment. Simply, it will cover the "stuff that just breaks". 


cpf said:


> Make sure to include some wording on the guarantee of functionality, or lack thereof, of the equipment. Do you just guarantee that it will be functional at the start of the rental period, or will you perform repairs as needed during the rental? What's the policy on 3rd party/DIY fixes?


 
No one is skilled enough for a DIY with microphones, but that is a great idea to include just to cover myself. And who knows, someday I'm sure it will be an issue.


This is great advice so far!


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## derekleffew (Oct 21, 2011)

FACTplayers said:


> A maintenance fee is a nominal fee I am going to charge for all rentals. It will be put into a fund which will cover the normal wear and tear of the equipment. Simply, it will cover the "stuff that just breaks".


This should be "hidden" and included in the cost of the item rental. I've never seen it called out as a separate charge. By doing that, you're just inviting the "So if nothing breaks, you'll waive that charge?" question.


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## FACTplayers (Oct 21, 2011)

derekleffew said:


> This should be "hidden" and included in the cost of the item rental. I've never seen it called out as a separate charge. By doing that, you're just inviting the "So if nothing breaks, you'll waive that charge?" question.


 
Good point. I hate that question and no one likes to hear that the fee won't be waived.


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## mstaylor (Oct 21, 2011)

Derick beat me to it, just hide it. I understand why it there and it makes sense, it is just no difference than you admin costs or purchase price, it all falls under operating costs which is part of the rental price. Now if they do something that blows up equipment or dents windscreens, etc then they need to be paid for.


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## DaveySimps (Oct 21, 2011)

How about a statement of liability, or an indemnification hold harmless clause? If someone uses your gear and gets hurt, do you have insurance to cover their medical fees? Do you have insurance at all? People climbing on speakers will fall. People spilling water on an amp or active speaker could get shocked. In the litigious society we have (unfortunately) become, this should be a concern of yours. Never underestimate the stupidity and greed of people. If something major happens in the venue, EVERYONE who has legal ties to the situation will be named in the aw suite. Extreme case scenario? Yes, but worth thinking through how it could effect you.


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## museav (Oct 22, 2011)

FACTplayers said:


> I've been toying with the idea of creating a formal rental agreement for my audio equipment. What do you guys think I should include in the agreement?
> 
> As of currently, I have that the party renting is responsible to pay the agreed upon maintenance fee along with all apparent damage done to any equipment during the duration of possession.
> 
> Basically, I want my equipment protected. The theatre is in a public school, and in the past microphones have gone "missing", so the school has opted not to buy equipment anymore. I have no problem buying the equipment and renting it out; I just want something in writing to cover myself.


Is this your personal gear or the school's? Would it be part of a venue rental or are you renting equipment that may then be taken off site?

Wanting to protect yourself is completely understandable, but the parties renting want something covering them as well so you have to find what will be acceptable to both parties. Think of renting a car. How is change of possession defined and documented? How are you going to document the operating condition when they take possession? How are you going to document the condition when it is returned? What is considered normal wear and tear? Who determines damage versus failure and how are they protected in case of failure? What is the repair or replacement process in case of damage and who determines repair or replacement costs and suppliers? How do you make sure that they will be able to pay for any damages? It may not be practical to cover every aspect but the better the commitments and expectations of both parties are defined the less likely the chance of misunderstandings or disagreements if a problem does arise.

If the equipment involved is public school property then you may also need to discuss the entire concept of it being rented with the appropriate school or school board officials. They may have conditions or terms that they feel need to be applied regardless of any other considerations and if they are actually the Owner of the equipment then it is their call. The potential of this being seen as the school going into business and competing with private businesses, the ones whose taxes pay for the school and the equipment, may need to be addressed.


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## gafftaper (Oct 22, 2011)

museav said:


> If the equipment involved is public school property then you may also need to discuss the entire concept of it being rented with the appropriate school or school board officials. They may have conditions or terms that they feel need to be applied regardless of any other considerations and if they are actually the Owner of the equipment then it is their call. The potential of this being seen as the school going into business and competing with private businesses, the ones whose taxes pay for the school and the equipment, may need to be addressed.


 
This is a really critical point. If someone is renting the school auditorium you can say a standard rental includes the room but if you want to use the house sound equipment there are additional fees (and rates accordingly depending on how much they use). However renting equipment out to anyone who walks in off the street to use at their own gig is likely to be against district policy and possibly illegal. At the Community College, I was told that the state is not in the rental business. We can rent additional gear to people who use our facility. However it is illegal to be renting gear out to someone who wants equipment for an event at another facility. You need to be talking to some people down at the district offices about this.


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## FACTplayers (Oct 24, 2011)

Thanks guys. This should get me well on my way to covering just about everything I need to cover. The gear is my own personal gear, but it will eventually be sold to the community theatre I work; however, they have still asked me to draw up the rental agreement.


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## SeanR (Oct 24, 2011)

Okay, I realize this may be totally unnecessary, but I always feel like I need to throw this point in.

I can't tell you how often I read a contract that someone wrote on their own and I can't understand a word of it. People seem to think that contracts need to sound fancy because lawyers have been poorly writing contracts that way forever. This is a big generalization, but in general courts will not enforce a contract if the parties or the court do not understand what it says.

By all means, use industry terms, or other technical language. But in general using plain everyday language is just fine and enforceable if (god forbid) it should come to that.)


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## FACTplayers (Oct 24, 2011)

SeanR said:


> Okay, I realize this may be totally unnecessary, but I always feel like I need to throw this point in.
> 
> I can't tell you how often I read a contract that someone wrote on their own and I can't understand a word of it. People seem to think that contracts need to sound fancy because lawyers have been poorly writing contracts that way forever. This is a big generalization, but in general courts will not enforce a contract if the parties or the court do not understand what it says.
> 
> By all means, use industry terms, or other technical language. But in general using plain everyday language is just fine and enforceable if (god forbid) it should come to that.)


 
You make a point that did need to be said. This isn't the first contract I've written (read, or signed), but you make a very valid point. Plus, you would be foolish to sign something you don't understand. Case-in-point south park's "Human Centipad"


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## FACTplayers (Nov 6, 2011)

Completed the rental agreement. Here is the link to the document.

https://docs.google.com/open?id=0B2PDdSLflfjwMjYwNTU3ZmYtYjIxNC00Zjg2LWJhZmEtNTQ5NjQ3MmE4NTVj


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## mstaylor (Nov 7, 2011)

Way, way, way too complicated. Are you saying that somebody couldn't rent something to supplement their gear on a rental to a third party? For example, I was going to supply gear for a show and I was short some mics, I go to you to get them, can't I then use them to fulfill my contract. I can see not a drop rental to a third party but If I am actually using the gear for an event, what difference does it make where or how I use it?


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## FACTplayers (Nov 7, 2011)

mstaylor said:


> Way, way, way too complicated. Are you saying that somebody couldn't rent something to supplement their gear on a rental to a third party? For example, I was going to supply gear for a show and I was short some mics, I go to you to get them, can't I then use them to fulfill my contract. I can see not a drop rental to a third party but If I am actually using the gear for an event, what difference does it make where or how I use it?


 
I disagree that it is too complicated. It is written in such a way that any size organization can use the agreement. Simply write in a few lines on the first page voiding out those lines below. Most of the agreement is there just in case. 

If you want to rent gear from the Lessor to use at an event you are allowed to, even if it is not your event. What you are not allowed to do is rent the gear from the Lessor and turn around and rent it out and act as the Lessor. Simply fulfilling your contact, as say a sound designer, is fine as long as you are being paid to operate the equipment and not to supply it. Going in to third party rentals brings up more and new legal issues, plus I want to know who has my gear and where it is at all times.


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## BanditRO (Nov 7, 2011)

It may have been mentioned already and bears repeating if so, get a COI - Certificate of Insurance. If any damage occurs through neglibence of the Lessor, one has recourse to recover expenses against THEIR insurance and leave your own untouched.

This also has the consequence of making the Lessor feel responsible for the gear knowing they will pay for it if they do not take care of it.

Typically, a COI costs nothing unless a claim is made making this a "Non-burden" to the Lessor.


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