If you break the short term rental business down to its atomic level, it’s a transaction between host and guest. In this transaction, you are providing guests with a rental property for some time. While we tend to abstract a couple of layers above this and call it “hospitality,” the reality is that there is a financial transaction that predicates the rental period for all short term stays.
A short term rental contract outlines the terms and conditions of this rental transaction. These agreements are crucial for clarifying the expectations and responsibilities of both parties during the rental period. Each stay is about creating an experience that starts with trust and clarity from the moment a guest comes upon the listing. This trust is built on clear communication, where the expectations and responsibilities are transparently laid out, transforming what could be just another transaction into a memorable and hospitable guest experience.
In this blog post, we are going to provide you with a complete guide for all things rental agreements. Let’s begin.
You might have heard it referred to by several different terms. Some of the names we’ve heard a Short Term Rental Contract being called are:
We will use these terms interchangeably throughout this post. Each term describes the same thing—a legal document that outlines the terms and conditions agreed upon by the host and guest for a short-term stay.
A short-term rental agreement defines the responsibilities of both the property owner and the tenant. Having a well-crafted short-term rental agreement in place solidifies expectations and provides a legal framework for the rental.
It protects property owners by legally binding the tenant to adhere to the terms, which include caring for the property and making payments.
For tenants, a short-term lease provides a clear understanding of their temporary rights to the rental property. The agreement also supports fair resolution of any disputes by referencing state and local laws, which govern the rental arrangement.
Let’s take a look at a vacation rental contract and break down its key components. We are going to use a short-term rental agreement template, generously provided by Lodgify.
Before getting into the short term rental contract, this vacation rental agreement template has a page summarizing the reservation details. This page has information about the rental property address, the guest information and booking details, and the payment info, including the rental rates, the rental period, and additional charges.
Following this, we can see the meat and potatoes of the vacation rental agreement template. Take note of the language of this short term lease. It’s quite direct and matter-of-fact. By simplifying and making the document's purposes clear, guests will find it easier to comprehend and adhere to the terms laid out in the short-term rental contract.
Every short term rental contract must include the rental’s precise address, a list of available amenities, and their condition. Attaching an inventory checklist to the contract is a good idea as it specifies the condition of items like furniture and appliances. The guest's acknowledgment with a signature on this inventory ensures transparency about the state of the rental property, safeguarding against disputes over potential damages.
The vacation rental agreement template asks guests to record their full name, identification (an ID, passport, or driver’s license), permanent address, phone number, and email of each guest. Depending on the rental location, state laws, local laws, and applicable tax laws, you may also need to keep a copy of the guest's ID.
Vacation rental agreements should state the maximum number of guests allowed, in compliance with local regulations. Be clear on the capacity to avoid penalties—again, depending on local laws and state laws—and consider setting limits to manage additional fees for extra guests.
Specify the times for guests to check in and out to streamline property management and enhance the guest experience. If your schedule is tight, detail any charges for late check-outs to encourage adherence to the scheduled times.
If you have minimum or maximum stay policies, include these in your agreement. This helps avoid issues with quick turnovers or extended stays without consent.
Define the house rules in your agreement, including specifics about noise levels, property maintenance, and any prohibited activities to prevent misuse of your property. You may also have information like this in your scheduled automated messages, but list them here so that the guest agrees on with this short term lease agreement beforehand.
Be transparent about all costs, breaking down the rental rate, cleaning fees, taxes, security deposits, and any other charges. Specify the accepted forms of payment and any associated fees, like credit card surcharges.
Include your cancellation terms, even if it’s listed on OTAs with their policies. Define how refunds will be handled and the conditions under which reservations can be canceled by either party.
Ensure the contract is signed by all parties, validating that guests and hosts agree to the terms. Include space for initials on each page to confirm that all information has been reviewed and understood.
A template is a jumping-off point for you and your short term rentals. So for property owners and property managers who are curious about customizability, here are some places where you can add to your lease agreements.
Addressing the possibility of fraudulent bookings is part of the rental business. By specifying actions that constitute a fraudulent booking, such as misrepresenting the purpose of the stay or inviting more guests than allowed, you can more easily prevent and manage these situations.
Detail how guests should report maintenance issues and provide contact information for emergencies. Offering guidance on these matters can ensure quick resolutions and prevent misunderstandings.
Sometimes you might need to access the property during a guest's stay for repairs or emergencies. It's important to explain the conditions under which you may enter the premises and the notice period you will provide.
Your rental agreement should reflect the unique aspects of your property. Include any specific details that guests should be aware of, like environmental conditions, certain details regarding the security deposit, or accessibility features. A standard template may not cover that.
Creating your short-term rental agreement with a legal advisor or modify a pre-made template. For ready-to-use templates, consider exploring these resources:
These platforms offer a variety of templates that you can tailor to align with the specifics of your rental property and the laws of your area.
A lease is a fixed contract with a set duration, usually committing the renter to a longer period under specific terms.
A rental agreement offers more flexibility, allowing for termination at will by either party.
If the contract terms are not disclosed before a booking is made, guests have the option to refuse to sign the contract upon arrival.
In such cases, they are entitled to request a cancellation of the reservation at no extra cost to themselves. For more information about Airbnb’s short term rental contracts, view their support article here.
VRBO has a similar policy to Airbnb which distances itself from enforcing the details of the short-term rental agreement.
This gives the guest the ability to cancel the reservation at no additional charges if the specific rules and requirements of signing the contract aren’t displayed beforehand.
A short-term rental agreement is the backbone of the rental transaction, clarifying to each party, the terms, policies, rental rates, and the rental term. This short-term rental contract, vacation rental lease agreement, or term rental agreement—whatever you want to call it—is essential for property managers and term tenants alike., ensuring that guests understand what they can expect from the vacation rental.
By detailing everything from property details and guest information to house rules and financial terms, these agreements set the stage for a successful stay and minimize exposure to risk for your vacation rental business.
