Dealer Communicator’s Seminars In Print Leasing
Pay Attention or Pay the Price
by Mary A. Redmond – Original Article Available Here
Thank goodness we’re all done with that lease negotiation. The equipment is working great. “Stick those legal mumbo jumbo contracts in the file drawer. Let’s get back to business and make money with the new equipment.” That’s often the command from the bridge by the Captain of the USS Hard Working Printer.
There’s relief when an equipment negotiation is done. Business owners think nothing more needs to be done except make the leas payments. Believe that, and experience costly surprises. Leases require customer vigilance.
Five Lease Notification Requirements
1. Insurance Proof: If the Lessee doesn’t send the Lessor an insurance binder proving the leased equipment is covered by General Liability and Physical Damage insurance, the leasing company secures the insurance for the Lessee, at a high price plus a fee.
2. Tax Exempt: Printing equipment lease payments are frequently sales and use tax exempt. State’s offer this exemption as a stimulus to encourage business to expand, add equipment and increase their employee headcount. Customers must notify the leasing company that they qualify for this tax exemption or the leasing company collects and remits the taxes to the state plus a processing fee.
3. Relocate Equipment: Request written permission to move equipment across the room or to another town. Remember, the leasing company owns the equipment.
4. Corporate Ownership Changes: Notify the Lessor at least 30-days prior to any change in the company name, headquarters location or company ownership. If this isn’t done, the lease is in default. The default paragraph is the longest and most onerous paragraph in every lease. No one wants to experience lease default penalties.
5. End of Lease Notification: Notify the leasing company of your business plans for the equipment. Don’t wait until the lease ends to give notice. This is one of the most costly requirements, when not heeded leases go into Automatic Renewal.
WARNING: Written notice options usually include the ability to purchase, return or renew the leased equipment. A Florida printer I know is trapped paying twelve extra lease payments ($12,000) because they didn’t notify the leasing company of their intent to purchase the equipment for $1.00. The lease required them to send written notice no less than 90-days and no more than 120-days before the lease ended. Stuck!
Develop a tracking system of lease notification requirements on the first day of the lease. Peace of mind will be the reward. DC
Mary A. Redmond provides highly specialized information for corporations, managers and dealers who negotiate and manage leases. With 28 years in the leasing industry, including 21 working for the largest leasing companies in the U.S., Mary knows leasing. You may reach Mary at 913-422-7775 or mary@reviewyourlease.com
2013 Chapter Member of the Year
National Speakers Association – Kansas City