Purchase Option for Capped Rental Items (Rev. 1, 10-01-03)

by  Jared Staheli
June 17th, 2015

Effective May 1, 1991, suppliers must give beneficiaries the option of converting their capped rental equipment to purchased equipment during their 10th continuous rental month. Contractors make no further rental payments after the 11th rental month for capped rental items until the supplier notifies the contractor that it has contacted the beneficiary and furnished him/her with the option of either purchase or continued rental. Information contained in Exhibit 1 may be furnished to beneficiaries by suppliers to help them make a rent/purchase decision. Contractors provide copies of Exhibit 1 to suppliers. Beneficiaries have one month from the date the supplier makes the offer to accept this option. If the beneficiary declines or fails to respond to the purchase option, the contractor continues to make rental payments until the 15-month rental cap is reached.

If the beneficiary accepts the purchase option, the contractor continues making rental payments until a total of 13 continuous rental months have been paid. The contractor will not make any additional rental payments beyond the 13th rental month. On the first day after 13 continuous rental months have been paid, the supplier must transfer title to the equipment to the beneficiary.


Purchase Option for Capped Rental Items (Rev. 1, 10-01-03). (2015, June 17). Find-A-Code Articles. Retrieved from https://www.findacode.com/articles/purchase-option-for-capped-rental-items-26687.html

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