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The contractual relationship between the lessee and the lessor is governed by 49 CFR 376, Lease and Interchange of Vehicles, and enforced by the Federal Motor Carrier Safety Administration (FMCSA).
There are specific requirements that must be part of the agreement, while other terms can be negotiated.
The following is a high level plain English list of the requirements.
The parties may negotiate certain items such as who will bear the expenses of fuel, fuel taxes, empty mileage, and other operating costs. The lease must also state who is responsible for deductions. This information must be clearly spelled out in the lease.
Some requirements of the leasing rules are not open to negotiation. The requirement of a 15-day settlement period is not negotiable. Nor is the lessor’s right to a copy of the rated freight bill when compensation is based on a percentage of the revenue. The lease must also specify the carrier’s (lessee’s) obligation to maintain insurance coverage for the protection of the public.
The lease may provide that, upon termination of the lease, the lessor must remove and return all identification to the lessee as a condition of payment.
The lessee/authorized carrier must furnish a written receipt recording the date and time it takes possession of the equipment from the owner. Upon termination of the lease, the lessee must provide a “release of equipment” stating the date when the lease agreement ends, and possession and control is transferred back to the lessor.
The contractual relationship between the lessee and the lessor is governed by 49 CFR 376, Lease and Interchange of Vehicles, and enforced by the Federal Motor Carrier Safety Administration (FMCSA).
There are specific requirements that must be part of the agreement, while other terms can be negotiated.
The following is a high level plain English list of the requirements.
The parties may negotiate certain items such as who will bear the expenses of fuel, fuel taxes, empty mileage, and other operating costs. The lease must also state who is responsible for deductions. This information must be clearly spelled out in the lease.
Some requirements of the leasing rules are not open to negotiation. The requirement of a 15-day settlement period is not negotiable. Nor is the lessor’s right to a copy of the rated freight bill when compensation is based on a percentage of the revenue. The lease must also specify the carrier’s (lessee’s) obligation to maintain insurance coverage for the protection of the public.
The lease may provide that, upon termination of the lease, the lessor must remove and return all identification to the lessee as a condition of payment.
The lessee/authorized carrier must furnish a written receipt recording the date and time it takes possession of the equipment from the owner. Upon termination of the lease, the lessee must provide a “release of equipment” stating the date when the lease agreement ends, and possession and control is transferred back to the lessor.