Rental is available in many trades. Car rental is one example. Some providers of capital goods (such as television and video) and machinery (floor sanding machines, building equipment, rotary cultivators) also offer rental.
Renting goods
Rental agreements for movable property is not covered by any obligatory legislation, which means that there is no special law that states what the rental agreement should say, which conditions must or must not be included. Rental agreements are covered by the agreement law and the agreement condition law. If a condition in an agreement should be unreasonable, it may be altered through trial by the National Board for Consumer Complaints (Allmänna Reklamationsnämnden, ARN), or in a district court.
Rental period
The rental period is usually stated in the agreement. Sometimes the agreement also contains a clause stating that you must pay an extra fee if you terminate the rental period early. The fee shall be reasonable. If you have not agreed on a fixed rental period, the agreement is valid until you or the renter terminates it.
Liability for damage
An important part of the agreement is the liability for damage to the item you have rented. The starting point is that the renter, who owns the item, is liable for faults that arise and for accidents, even when the item itself (such as a television or a video) is located at your house. You shall only be liable if the damage is caused by your carelessness. If the television set that you have rented should be damaged during a fire in your flat, you are not responsible for the damage, on condition that the fire started by accident.
Read the agreement carefully!
In some agreements, the renter requires that you take out contents insurance to cover damage to the item. If, for instance, you rent a car or a trailer, there are very high excesses that you are liable to pay according to the agreement for theft or self-inflicted damage (such as if you have caused a crash). If you pay a special fee, an extra insurance, you can reduce the excess. If it is the intention of the agreement that you are to become the owner of the item after the rental period, it can in some cases be regarded as a credit purchase. In these cases, the consumer credit law applies.
Leasing
Leasing is a mixture of credit purchase and long-term rental. The set-up is like a purchase by instalments, but legally it is considered as rental (financial leasing). Therefore you do not own the goods, but are expected to return it when the rental period expires.
Leasing agreements, which are common in business, are only available in ordinary consumer agreements to a limited extent. In the 1980s, it was common for cars to be leased to private individuals, but the consumer problems that arose have gradually made private leasing agreements rare. The format of the agreement makes it difficult for consumers to get an overview of the costs, which are often very high.
As leasing is not regarded in law as a credit, you pay no interest to the leasing firm. Instead, you pay rent for the goods you are leasing. As opposed to the interest on a debt, the rental is not tax deductible, which means that you cannot make any deduction from tax, which you may do for interest that you pay on a loan.
Residual value
When the agreement period has expired you are meant to hand back the car, or redeem it for the so-called residual value. The residual value is the amount that the leasing provider has decided shall remain to pay when the leasing agreement ceases. This is often a different value from the car's actual market value. Even if you hand the car back, you are liable for the difference between the residual value (= remaining debt) in the agreement and the car's actual market value.
Example: According to the leasing contract, your leasing car has a residual value of 50 000 kr, but the actual market value is only 20 000 kr. In order to redeem the car you have to pay 50 000 kr to the finance company. If you hand the car back, you have to pay the difference - 30 000 kr.
