A word about coin op laundry machine contracts


coin operated washing machine

High efficiency coin operated washing machines

Author: Scott Goodman www.scenicwestpm.com


Are you using coin operated laundry machines in your rental properties? If so, it is a good idea to review your laundry room lease contract from time to time. 

The lease is structured so that you, the property owner, are the lessor and the laundry service company (LSC) is the  lessee; ie, you will be leasing space in your building (the laundry room) for the LSC to place their machines. This is an extremely competitive industry, and if you are well-informed you can negotiate very favorable terms for yourself.

At the very least, make a note to yourself of the expiration date of the lease, as I have seen some lease proposals that last 7 years. Furthermore, many contracts include an automatic term renewal clause which could have you kicking yourself after you hear the next thing I have to say. Historically, LSCs like Coinmach and Web split laundry income 50/50 with owners.  That’s not the way it is nowadays.  There are signing bonuses, 60/40 income splits in favor of the owner, laundry room improvements and machine upgrades to be had for the asking. Some of the machine upgrades can pay for themselves with so called “going green” rebates from third parties like the DWP.  That is the case if you decide to go with high-efficiency machines (HE machines). Some of these rebates have gone as high as several hundred dollars per washing machine for the water they expect to save over the lifetime of the machine. 

So pay attention and don’t miss out on this simple opportunity to improve your bottom line.  At the very least you will increase your laundry income; or you may even get a laundry room remodel out of it. And while you are at it, cross out that clause regarding the automatic renewal of your laundry room lease contract.

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2 Responses to “A word about coin op laundry machine contracts”

  1. David Stewart says:

    Any way to get out of these leases? My father-in-law bought a building with one of these things. 5 year term with automatic renewal for two more terms, only cancellable at the request of the Lessee. He’s trying to renegotiate, but the service is saying the lease is final.

    Doesn’t seem reasonable for a contract to last for 15 years with no chance to renegotiate or cancel based on poor service or changed conditions. One way contracts seem so 18th Century.

  2. You’re right, it doesn’t seem reasonable that the contract can be rescinded by only one of the parties involved. Our LSC tried to include an automatic renewal clause upon expiration. We eliminated that clause, leaving us free to negotiate new terms at the end of the 5 year lease period.

    Go over your father-in-law’s contract thoroughly, and if that’s truly the case, I would suggest you contact a legal professional to further understand your options. Let us know how it goes.

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