Having a short-term rental agreement in place has many benefits. Perhaps most importantly, it helps property managers avoid unnecessary headaches and prevent damage. How vital this short-term lease is might depend on the platforms you’re using to rent out your properties.
In this article, we’ll explore why agreements are important, who needs them, and what to include in them. As a bonus, we’ve built a short-term rental agreement template you can download and customize to fit your business needs.
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Free Vacation Rental Agreement Template
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What’s the purpose of a short-term rental agreement?
A short-term rental agreement helps to ensure that a tenant will leave your property in the same condition they found it. It also puts all the important details in writing so that there’s no confusion on what’s provided on your end, and what’s expected from the tenant. Once it’s signed, it becomes a legal obligation for both you and your guest to adhere to your vacation rental contract. Most rental agreements outside the listing sites like Airbnb or Vrbo are written in a way that favors the property owners.
Note that short-term rental agreements are much different than in a traditional real estate lease. Short-term rental guests typically have fewer protections than long-term tenants. There are also few (or none at all) landlord and tenant obligations like in a long-term rental. That means you can load your agreements with many more stipulations that favor you (regardless if you’re a manager or property owner.)
Do you even need a short-term lease agreement?
If you’re renting your property through sites like Airbnb, Vrbo, or Booking.com, then put simply, no you don’t need a short-term rental agreement. Why? These OTAs have their own agreements, written into their terms and conditions. However, these short rental agreements tend to be incredibly broad and don’t cover important specifics related to your property.
You also have to remember that the short-term rental agreements found on these sites were written in the best interest of the platform—not necessarily the property owners or you, the manager. So some finer points may not be covered or could sway in favor of a guest. After all, the goal of these listing sites is to get repeat guests, not necessarily to protect the property managers or owners.
If you’re hosting guests outside of a third-party platform, like through a direct booking site, then some sort of vacation rental contract is necessary assurance in the event that something goes awry.
What to include in a vacation rental agreement
Regardless of what platform you’re using, asking guests to sign what is essentially a short-term lease is never a bad idea. The agreement makes sure that the renters have actually read your conditions for their stay and mitigates the risk of a potential disagreement or miscommunication. It operates as a legally binding document and holds both parties accountable for the terms of the vacation rental contract. It also shows your commitment as a property host to fairness and professionalism.
So what should you include in your short-term rental agreement? The critical info to include can be broken down into five categories:
- Contact information and basics
- House rules
- Property description, expectations, and logistics
- Security deposit guidelines and cancellation policies
- Digital signatures
Contact information and basics
The first thing you want to have in a short rental agreement is all of the information about both rental parties, the stay itself, and the property. Be sure to include:
- Full names, addresses, and contact information (email and phone numbers) of both the property host and the guest.
- The arrival and departure date of the stay (sometimes called the rental period)
- Check-in and check-out times and whether guests can self-check-in
- The daily, weekly, or monthly rental rate, payment terms, and payment methods
- Basic stats on the property, like the number of beds or bedrooms, and the maximum occupancy
- Whether the guest will be charged a cleaning fee, and when that fee gets charged.
- You should also include cancellation policies so renters are aware ahead of time should they end up cancelling
This part of a lease agreement also gives you the opportunity to communicate other fee-based services you may have. This would include things like bike rentals, tours, airport pickups, or other services that you offer for a fee. Be sure to also include your fee rate for pets or additional guests, if you have them.
No vacation rental contract would be complete without some basic house rules. House rules are based on what your preferences are as a host or manager. Some items to consider including are:
- Your party policies (and smoking rules!)
- Maximum number of guests allowed and any suitable (or not!) parties, including children
- If the property adheres to quiet hours, it’s nice to include those with your rules as well
- Rules about amenity use (including swimming pool, hot tub use, or boat use)
- It’s always a good idea to mention that no illegal activities are allowed, even if it feels like stating the obvious
- You can also reiterate previously touched-upon topics, like cancellation policies and pet fees (or lack thereof)
- Additional/potential fees your guests should be aware of
- Applicable local rules, state laws, and municipal bylaws and ordinances. Note: Breaking some of these rules could lead to eviction from the vacation home if there’s a visit by law enforcement. So it’s important to remind the guest that if that happens, your company isn’t liable to provide alternate accommodations.
- While it’s unlikely anyone will sublet a vacation home, you still want to reduce your exposure to shady tenancy, especially in longer-term rental periods
Vacation rental description and logistics
Your short-term rental agreement should also include property information useful to guests during their stay. Some examples might be:
- Specific directions to the property
- Where to find the keys or how to enter the building (pin code, etc.)
- Any info on parking
- Specific expectations about how you expect the property to be left (for example, dirty linens left on the bathroom floor or dishes loaded into the dishwasher)
- Info on any cleaners who might come by or linen changes to expect
- Finally, another item to include is your rights as the property host, such as the right to enter the property during a guest’s stay in the case of necessary maintenance or an emergency. However, specify the period of time you may need access to the property.
You know your rental property best! So think about what guests will need to know to get settled in as easily and hassle-free as possible—which will also help you give your renters a better guest experience.
Security deposit guidelines
It’s also important to include security deposit guidelines and any cancellation policies with the following:
- If there is a security deposit, you should include the amount as well as your terms around its return. Most agreements have a dedicated section for that. It’s important to highlight that the reservation will only be valid once you’ve received the deposit in full. You’ll also have to detail the amount required for the security deposit, and the time by which it’s expected. Generally, most hosts or managers list one or two payment detail methods.
- You’ll also have to explain what the deposit covers, that it covers a specific rental period, and conditions under which your vacation rental management company will withhold the deposit in case of damages. This section usually ends with a sentence or two about when the deposit will be returned (usually 2-3 business days after the rental period ends.)
Finally, your short-term rental contract should also be a short rental agreement, meaning you want to hit all the necessary points, but also make it brief enough so that someone wanting to start their vacation will actually read it through. Both parties should also sign the agreement in order to make it legally binding.
You can use an online service so that your guests can e-sign the agreement before their arrival which lends many managers peace of mind. You can also require renters to sign in person upon arrival. However you go about it, this step should not be skipped!
Here are a few other factors to consider when preparing a vacation rental agreement:
- Local and state laws
- A solid back-up plan
- Vacation rental agreement benefits
- Due diligence
- How to begin
Local and state laws
It’s important to make sure that your short-term rental agreement is compliant with local property laws as well as state-wide laws. In general, you want to make sure that you understand governing laws and any implications they might have for you. Meet with a lawyer to gain an understanding of local property laws and to review your rental agreement.
A solid back-up plan
While a signed short-term rental agreement holds both parties legally accountable for following the terms of the agreement, it’s never a guarantee that nothing bad will happen. That is why you should also consider vacation rental insurance for your property. In fact, you will likely be required to have liability insurance, but you may want to consider your insurance options further to cover damaged or stolen property.
Vacation rental agreement benefits
Having a short rental agreement between you and your temporary tenants doesn’t just benefit you. It also protects your guests as well. Signing a short rental contract will give them peace of mind that their host won’t try to pull anything shady, like adding on extra fees. Essentially, it improves the guest experience.
As part of your property management due diligence, you should read through the terms and conditions of the third-party booking sites that you are using to see how adequate they are to your needs.
How to begin
Where to start?! You can begin by writing down your own short-term rental agreement following the guidelines above or download a template. Then bring your rough template to a lawyer or an attorney for final review. If part of the work was done ahead of time, the attorney’s fees might not be as expensive as you’d think.
You may have noticed that a lot of the information listed above is already provided on sites like Vrbo and Airbnb. As previously mentioned, for guests who book through these sites, it isn’t necessary to include an additional vacation rental agreement, but it never hurts to give renters the information again.
In the case that renters are booking directly through you, all of this information should absolutely be included in the contract. Again, every rental property is different, and the formula is not one-size-fits-all. Give some thought to any other policy or terms you would like your guests to agree to.
At the end of the day, you know your properties better than anyone. So, when it comes to your short-term rental agreement, the when, why, how, and what it includes all depends on what you need to be a successful property host.