How do I check an HVAC company’s rental equipment contracts?

Start with an inventory. Walk the shop and the vans with the seller and note each water heater rental, furnace, tool, vehicle accessory or gas-detection device that could belong to someone else. Compare that list with the rental agreements and the monthly payments in the books. Gaps in either direction are worth asking about.

Read each agreement for term, renewal, buyout choices, repair responsibility and early-exit charges. Ask whether the lessor must approve a new owner and whether a personal guarantee from the current owner is attached. Your lawyer can explain what each clause means for you.

Think also about customers’ equipment. Some HVAC firms rent units to homeowners, and those contracts are assets, but they come with service duties. Ask how many are active, how they are billed and who repairs them. The equipment valuation and financing pages from public lenders explain how such assets are usually examined, and your accountant can show how the payments appear in the statements. Photograph nameplates where you can, so each unit can be matched to an agreement later without arguments over what was supposed to be there.

Key takeaways

• Match every rental agreement to a physical item and a payment in the books.
• Check end dates, buyout choices and any consent a lessor requires.
• Separate equipment the company owns from equipment it merely uses.
• Photograph equipment nameplates so units can be matched to agreements.