Five Points to Consider When Leasing Construction Equipment

 

 

As the construction industry starts to rebound from a down market, rentals of project equipment are on the rise. Whether you are an owner, principal contractor, or specialty trade subcontractor, you may very well be renting equipment for use on an upcoming project. Here are five important points to bear in mind:

 

1.    Do not accept the equipment without thoroughly inspecting it first. Failure to do a full, visual and utility inspection on a rental product could mean that you may be held responsible for existing damages or defects in the equipment. If damage is not documented prior to acceptance of equipment, it will be your word against the lessor’s—and the lessor is likely to have favorable contract language on its side. The best way to avoid this fight is to conduct a thorough inspection while recording (perhaps by taking digital photos) every aesthetic or operational issue with the equipment. Conduct the inspection in the presence of the lessor, provide the lessor with documentation or notes of all existing damage, and retain a copy of the documentation. Also be sure to reject the equipment if it does not appear to be fully functional.

2.    Be sure to obtain insurance coverage for the rental, or confirm in writing that coverage is otherwise in place. Under the lease agreement, the renter is typically charged with the duty to obtain insurance coverage for the equipment, both in the name of the renter and the lessor. Failure to have required coverage in place pursuant to the terms of a lease agreement will mean that you are responsible for casualty or loss to the equipment.

3.    Make sure your operating team is well-trained on the equipment’s maintenance. Required maintenance will often be spelled out succinctly in the rental agreement. If so, be sure to train your team to abide by it. If not, ask the lessor for its suggested maintenance in writing. If you fail to conduct required maintenance, the equipment may be damaged and you will be stuck with a hefty repair bill, or worse, you may be forced to purchase it —whether you want it or not.

4.    Meet the scheduled equipment return deadlines. Per most rental agreements, you will be charged an entire extra day (or week or month, depending on the duration of the rental) if you fail to return the equipment by the allotted time set forth in the contract. For large pieces of machinery, this could mean a significant price.

5.    If the equipment runs on gas or diesel, return it with a full tank. Much like national car rental companies, an equipment lessor can charge you significantly enhanced amounts for fuel if you neglect to “gas up” before
you return a piece of construction equipment. These amounts can add up and hurt your bottom line if your project teams are consistently leaving the gas bill to the mercy of your lessors.

With these points in mind, rent wisely and build safely, timely, and well.

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