Introduction to rental agreement / operating lease
An Operating Lease allows the customer to make use of equipment without the burdens of owning the equipment. The lease is usually structured over less than the useful life of the equipment. Unlike a Chattel Mortgage, CHP or Finance Lease the title of the equipment does not transfer to the customer at the end of the finance term.
If the customer wishes to own the equipment at the end of the term the financier may offer the customer a payout amount based on fair market value. Often an Operating Lease is used to lease technology equipment such as computers, printers, copiers and security equipment .
A business will use the lease to refresh equipment to ensure an adequate level of technology within the business to run the business. Usually it remains the customer’s responsibility to maintain, service and keep the equipment being leased in good working order.