If you have been in the rental business for a while, you probably do not need an explanation about the importance of rental agreements.
Those documents are essential for five reasons:
#1 Provides Legal protection.
Every rental business may face disputes sooner or later. Sorry for the bad news, but it is reality.
The disputes usually occur due to damages, payments, cancellations, and accidents.
You must have signed a legally binding document to protect your business in any of those instances.
#2 Sets liabilities and defines risks
The signed agreement legally transfers liabilities to the renter while the RV is in their possession.
It also states the possible risks that may occur during RV usage and sets the responsibilities of both parties when any of those risks arise in real life.
#3 Helps to Set Clear Rules and Expectations
A rental agreement allows RV owners to set rules and have their renters agree to them through a signature.
Rules can include things like:
- What renters can and can’t do (e.g., no smoking, no pets)
- How to return RVs after usage. For example, fueled, waste tanks dumped, cleaned, etc.
- Travel boundaries and mileage limits are essential to prevent excessive usage or the RV from traveling too far.
#4 Enhances Financial Security
A well-defined agreement outlines all the financial commitments or responsibilities of renters.
It can help attain consent from the renters for security deposits and charges for late returns, extra mileage, cleaning, or damage.
It also enforces cancellation policies to avoid losses due to last-minute cancellations.
#5 Enhances Transparency and Professionalism.
A company without an agreement is not professional, nor can it gain customers’ trust.
A good agreement shows renters how serious, organized, and professional your business is.
Thus, it makes renters feel secure since every rental term and its responsibilities are fully disclosed.
10 Steps to Draft RV Rental Agreement.
1. Name the Agreement
Agreements or contracts should be labeled with a clear title.
It is legally required and functionally essential.
You may title your something like:
“RV Rental Agreement” or “Recreational Vehicle Lease Agreement”.
2. Identify the Parties
You must state the parties involved in the agreement.
Usually, it is between the owner, a person or company renting an RV, and the renter, who takes possession of the RV during the rental period.
You must include the entire legal name, address, contact information, and ID number.
3. Describe the RV
You must include the exact details of the RV so that the RV that renters are getting is the same as the one on the agreement.
You can include the following information:
- Make, model, year
- VIN (Vehicle Identification Number)
- License plate number
- Odometer reading at the time of rental
- Exterior features such as color, shapes, etc.
4. Show the Rental Period
The rental agreement must display the rental period accurately so that both renters and owners know their rental schedules. And possibly avoid late pickups and penalties for late returns.
So, include:
- Date/hour of the rental begins and ends
- Pick-up and return locations.
- Late return policy (e.g., fees per an extra hour or a day)
4. State Your Rental Fees
The very first thing renters look at is the RV pricing.
So, you must state it clearly in your agreement for transparency and to avoid financial disputes.
Make sure your rental period and the total cost of the rental match.
You can structure the fee details in the following format:
- Daily, weekly, or flat rate charges
- Total cost of the rental
- Payment schedules. (e.g., deposit upon schedule, the remaining balance due 3 days before the pickup date, etc.)
- Accepted payment options (credit card, check, money order, PayPal, cash, etc.)
6. Set Terms for Security Deposits.
Security deposits are usually refundable if renters fulfill their rental obligations fully. If not, the deposit can be used to cover your costs.
But you have to state all that in your rental agreement.
Here are the key details you need to include:
- Amount of deposit. You can set it as % of the total rental fee.
- Due date. It should be collected on the day of booking or at least before pick-up.
- Refund process. The state the when and how the deposit refunds will occur.
- Reasons for withholding. You can state under which terms renters won’t get their security deposits back. For example, in case of damage, no-shows, late returns, etc.
7. Outline Usage Restrictions
Your rental agreement is a perfect tool to deter RV usage neglect.
When you outline usage restrictions and the possible penalties for not complying, you encourage renters to use your RVs with greater care.
Some of the restrictions you may include but are not limited to:
- No off-road use.
- No smoking, vaping, or drug use
- No towing with unsuitable trucks.
- Geographic limits (e.g., no travel outside of state, etc.)
- No pets are allowed unless explicitly allowed
- No Painting
8. Include Insurance Requirements
RVs are costly and damage can be crippling, especially for small startups with a minimum number of inventories.
That means you must sort the insurance policies before you send your RVs out the door.
Include all the insurance requirements and terms in your rental agreement to avoid unpleasant disputes in case of damages or accidents.
Things you can include:
- Who is responsible for insurance coverage?
- The requirements for insurance and what it covers (e.g., liability, collision, etc.)
- When proof of insurance must be submitted. (Usually before the pick-up).
9. Set Maintenance Responsibilities.
Maintenance details and responsibilities should be agreed upon because they can guide renters in deterring potential breakdowns and acting if such cases occur.
- Daily upkeep (e.g., checking tire pressure, emptying gray/black water tanks, checking oil level, etc.)
- Mechanical breakdowns – what to do and who to call
- Repairs – Who is responsible for repairs, the reimbursement process for emergency repairs, etc?
- Cleaning requirements (e.g., sweeping floors, washing dishes, checking for pests and insects, etc.)
Some RV rental companies offer road assistance plans to help stranded renters. If you provide that, mention it as well.
10. Set Rules for Drivers
You never know who will rent your RV.
In some cases, a person renting may not be the person pulling or driving the RV.
So, make it clear who is legally allowed to drive:
- Must have a valid driver’s license
- The driver must have insurance
- Minimum age requirement (e.g., 23+)
- No history of serious accidents.
11. Provide a Cancellation Policy
You must include the cancelation policy because last-minute cancelations or no-shows can cause financial losses.
Here is the key information you can add to your rental agreement regarding cancellations:
- How far in advance must cancellations be made
- Policy for weather-related or emergency cancellations
- Non-refundable deposit policy (if any)
- Refund amounts based on timing (e.g., full refund 30+ days out, 50% refund within 14 days, no refund within 7 days)
12. State Liability & Indemnification
Once RVs are rented, the accidents and damages are beyond the control of business owners.
So, your document should state that RV renters are liable for accidents, injuries, and damages.
You may mention it in the following format:
- Renters accept full responsibility for the RV during the rental
- A renter agrees to indemnify the owner against any claims or damages
- The owner is not liable for accidents, injuries, or lost/damaged personal items
13. Include Signature Section
You must have a signature section for your rental agreement where customers will input the following information:
- Printed names of both parties
- Signatures
- Date of signing
14. Add Any Additional Terms or Attachments
- Inventory checklist (the list of things that come with an RV)
- Orientation form (confirming the renter was shown how to operate systems)
- Optional equipment (bike racks, generators, solar panels)
- Mileage log or fuel log
- Photos of vehicle condition at pick-up
Please note: Whatever we mentioned in the list should not be a complete rental agreement but a draft. We recommend consulting with a lawyer or reviewing other rental contracts to create the final version.
Did You Know?
You can automate your rental agreements with Reservety!
Here are the primary features:
- Lets you create or customize electronic agreements and waivers
- Automatically displays agreements during the booking
- Allows customers to sign them electronically
- Limits the booking completion until agreements are fully signed.
- And other custom features depending on the business model
