Rent-an-Office

A “typical mid-range office arrangement”--executive desk, high-back chair, credenza and two visitors chairs--costs about $2,026 to rent for 12 months, the Furniture Rental Assn. of America said. The same furniture would cost about $3,371 to buy.

That typical office arrangement usually costs between $129 per month for basic furniture to $200 per month for luxury rentals, the group said. And the selection is much broader than it once was.

“You can get the basics or you can get something that is very handsome or you can get something extremely high-end like a . . . desk that’s worth $10,000,” an organization spokesman said.

Filling a conference room with rented furniture ranges from $100 to $400 a month and a reception area from $110 to $225, the group said.

Tax law changes in 1986 eliminated investment tax credits and stretched out depreciation for purchases such as furniture to seven years from five, the Furniture Rental Assn. said. But furniture rental fees remained 100% deductible as an operating expenses, unless it is a rent-to-own arrangement.

The office furniture rental business first took off during the Korean War, according to Frank Schad, who has been in the furniture business in Southern California for more than three decades.

“When the Korean War came along, the (furniture) manufacturers were busy gearing up for the war,” and were using their plants to produce materiel for the war effort rather than for the domestic market, said Schad, vice president and co-owner of Crest Office Furniture in downtown Los Angeles.

At the same time, big defense companies locally were also adding people for the extra wartime workload and they needed desks, chairs and all the rest to get their operations going, he said.

“They couldn’t get furniture,” Schad said, so the defense firms resorted to the then-unusual step of renting what they needed.

“Since that time it’s gotten bigger and bigger,” he said.

Rental agreements for office furniture vary widely from dealer to dealer, according to the Furniture Rental Assn. of America. Most business rentals last for three to 24 months, the group said.

Customers need to be particularly careful about what a contract says concerning maintenance of the furniture and any damages that might occur, said Steven Silbert, president of Los Angeles-based Holtzman Office Furniture Co.

“One of the biggest problems people have when returning furniture is they don’t ask (the dealer) how much they’re going to charge for damages when they return it,” Silbert said.

Customers should be on the lookout for dealers that don’t provide for “reasonable damages” when they return the furniture or won’t negotiate a damage waiver, he said.

Such reasonable damages for which a customer is not liable should be negotiated before the furniture is rented, Silbert said. A damage waiver also spells out what constitutes normal wear, for which the customer should not be charged.

“A particularly good agreement would be one which provides for immediate replacement of broken furniture or on-site repairs and additional services, which may be offered at reduced cost,” Silbert said.

The rental of office furniture may be on the rise--it brings in about $300 million in business and is projected by the Furniture Rental Assn. of America to grow 12% to 15% a year during the next 10 years. But is still tiny compared to sales of furniture for the office.

In 1987, domestic manufacturers of office furniture sold $7.3 billion in office furniture to retail furniture dealers, according to the U.S. Census Bureau.