Rent to Own Agreement - Personal Property

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Rent to Own Agreement - Personal Property Powered By Docstoc
					This attorney drafted rent to own agreement sets forth the terms of an agreement for the
rental of personal property (as opposed to real property or real estate) between two
individuals or an individual and a business. The renter and owner agree that monthly
rental payments shall be applied toward purchase of the property and that ownership of
the property shall transfer to the renter upon renter’s completion of a specified number
of payments. This document contains standard clauses commonly used in these types
of agreements, as well as optional language to allow for customization to ensure the
specific terms of the parties’ agreement are addressed.
                                Rent to Own Agreement Personal Property

Whereas, ___________________ [Instruction: Insert renter’s name.], an individual with an
address located at _____ [Instruction: Insert renter’s address.] (“Renter”) desires to possess
and have the use of certain property owned by ____________________ [Instruction: Insert
owner’s name.], a ____ [Instruction: Insert whether Owner is an individual, business, etc.
If a business entity, state type of entity and formation information.] having an address
located at _____ [Instruction: Insert Owner’s address.] (“Owner”) and described in Schedule
A (“Property”) [Comment: Insert detailed description of property being rented on Schedule.
Parties are advised some jurisdictions require a statement as to whether or not such
property is new or used, so please review and follow applicable requirements.], and

Whereas, the parties have agreed that Renter shall take possession of the Property on _____
[Instruction: Insert date.] and have the use of the Property until this agreement is terminated,
and

Whereas, Renter and Owner intend that ownership of the Property shall transfer to Renter upon
the completion of all the obligations set forth in this agreement,

Now, therefore, the parties agree as follows:

   1. Renter shall pay Owner the sum of $_____ [Instruction: Insert rental amount.] on
      _____ [Instruction: Insert rent due date.] and the same sum on the __ [Instruction:
      Insert monthly rental payment date.] day of each month thereafter until the termination
      of this agreement for rental of the Property.
   2. If payment is late by more than three days, a late fee of $_____ [Instruction: Insert late
      fee.] shall be due immediately from Renter. It is hereby understood and agreed among the
      parties that any such late fee shall not be considered a “payment” for purposes of this
      Agreement, except and to the extent same shall be comprised of any portion of a rental
      payment as set forth herein.
   3. The parties agree that the purchase price of the Property is $_____ [Instruction: Insert
      property purchase price.].
   4. The parties agree that $_____ [Instruction: Insert amount of rental payment towards
      purchase price each month.] of each month's rent payment, exclusive of any late fees,
      shall be applied towards purchase of the Property. If Renter shall make all payments
      pursuant to this agreement on time, the total cost of the purchase of the Property shall be
      _____ [Instruction: Insert total cost of Property.]
   5. Optional language: Parties may wish to insert a minimum length of time Renter must
      retain Property and whether or not a penalty will be assessed for early termination
      of the agreement.
   6. The parties agree that ownership of the Property shall transfer to Renter upon Renter's
      completion of _____ [Instruction: Insert number of payments.] payments as described
      above.


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   7. The parties agree that if Renter fails to complete the contemplated purchase of the
       Property for any reason, no refunds or credits shall be due to Renter.
   8. Renter shall have the sole obligation to maintain the Property, at Renter's sole cost and
       expense, in clean, good working order, normal wear and tear excepted. [Comment:
       Parties should disclose any additional agreements between them regarding repair of
       the Property, including whether or not Owner will provide loaner property during
       any time of repair, and what type of standard for comparability of any such
       property, if any. Also, if such loaner property will be provided, the parties should
       state whether same is at a cost to Renter. Parties should also state limitation of
       liability for Renter for any or all of the Property that is lost, stolen or damaged while
       in Renter’s possession.]
   9. Renter shall indemnify and hold harmless Owner against any and all claims, damages, or
       actions arising from Renter's possession or use of the Property.
   10. If Renter fails to make a payment within _____ [Instruction: Insert number of days.]
       days of its due date, Renter agrees to immediately surrender the Property, at Renter’s sole
       cost and expense, to Owner upon the Owner's written demand. In the event Renter fails to
       surrender the Property as set forth above, Renter agrees that Owner shall have the right, to
       the extent permitted by applicable statute, to enter Renter's property for the purpose of
       taking possession of the Property. Renter shall pay any costs of such repossession.
       [Comment: Parties should state Renter’s rights, if any, to reinstatement of the
       Property, even after repossession.]
   11. This agreement sets forth the entire agreement between the parties hereto and supersedes
       any and all prior agreements or understandings between the parties pertaining to any
       subject matter contained in this agreement. Any amendments or modifications hereto
       must be in writing and signed by both parties.
   12. In case any provision of this agreement shall in any respect be declared invalid, illegal or
       unenforceable, such invalidity, illegality or unenforceability shall not affect any other term
       or condition of this agreement, and this agreement shall be interpreted as though such
       illegal, unenforceable or invalid term of condition was not a part hereof.
   13. This agreement shall be interpreted, enforced and governed pursuant to the applicable
       laws of the state of _____. [Instruction: Insert state.]
   14. The pronouns used herein shall include, where appropriate, either gender or both, singular
       and plural.

Executed as of this __ day of ____, 20 _. [Instruction: Insert date.]
________________
Signature of Owner

________________
Signature of Renter




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                                Schedule A




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Description: This attorney drafted rent to own agreement sets forth the terms of an agreement for the rental of personal property (as opposed to real property or real estate) between two individuals or an individual and a business. The renter and owner agree that monthly rental payments shall be applied toward purchase of the property and that ownership of the property shall transfer to the renter upon renter’s completion of a specified number of payments. This document contains standard clauses commonly used in these types of agreements, as well as optional language to allow for customization to ensure the specific terms of the parties’ agreement are addressed.
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