Short Term Rental Agreements Explained

As a property owner, letting out your developments for short term vacation rentals may be a fantastic way to boost your income.

But that's only if you have a suitable short term rental agreement that covers you as a host and your guests. The right short-term vacation rental agreement can protect you as an owner, save you time and stress, and enhance your guests' experience. Doing well can help you meet their expectations, increase positive reviews, and protect you from a major dispute.

While not all property rentals are the same, there are some essentials that you need to consider when writing your agreement. To know more about this in detail, keep on reading as we will cover all of this today in this article.

Short-Term Rental Agreement explained

Before we fully delve into the essentials of what to include in a short term rental agreement, you must know what one is first. More or less, a short term rental agreement, also known as a short term rental contract, is a legally binding contract in document form that's kept between the host and their guests staying in their property for that duration.

Usually, these agreements cover a stay of 1-30 days. Unlike a typical lease, these agreements highlight that the property owner is responsible for services, utilities and other expenses for the property.

As a property owner, it can help minimise any potential risks such as damages or confusion from guests. For guests, it highlights the intention of their temporary stay, i.e. for tourism or leisure. The agreement

A short term rental contract aims not only to protect guests and hosts from a legal standpoint but also helps outline expectations, responsibilities, and rules. This protects you as a landlord, as upon signing, you have written evidence that guests know the regulations and conditions in advance. It also protects both parties from any discrepancies that might arise.

When do you implement a short term rental agreement?

While it may seem tedious to create a lot of paperwork for a short term rental agreement, it can save you a lot of time, money and legal issues in the long term. Because of this, it's vital that when any new guests rent your property, you use an agreement for them. Even if their stay is for a very short duration, always use it and even if you have friends stay too.

However, if you have guests that intend to stay longer than 30 days, i.e. one month, then a short term rental agreement will not be appropriate. Instead, this would require a fixed-term lease agreement that is drawn up every month.

Before you let out your property to guests, you must get them to sign a short-term rental agreement, to protect you and your assets. But, when doing this, all the relevant terms must be disclosed before the booking begins.

Therefore, you might want to first cover that information on the property listing platform and share the short term rental contract in the message thread with your guest or upon the booking request. That way, you can only accept their booking once they've thoroughly read and signed the contract.

What to cover in your short term rental contract

Arguably, no two short term vacation rental agreements are ever identical. That is because the property size may differ, furniture inside, duration of stay and services involved. Remember, the agreement has to protect you as an owner and your property.

But, while some factors can make the information vary, there are a lot of points that are mandatory for every owner to include. If you're confused about drafting an agreement, you might want to start with these main points and work your way around them.

Information regarding your rental property

Before you delve into the responsibilities of the guests and expectations, you have to explain your property thoroughly. Take your time to write a clear description of your rental and go into detail.

Remember that this section should include everything from the rooms, furniture, amenities and services involved. Consider it an inventory of your property with a description of each item, where it's located, and how to use it or access it. In addition to this, you should also write the address, what is your property, and the area guests can access. For instance, if you have a garden or pool for guests' use, then explicitly state it.

You'll also want to add your name and contact details in that you're the owner, so guests can get in touch if anything happens during their stay.

Most importantly, when writing this section, you should ensure the language is simple, clear and to the point. To prevent any words misinterpreted or confusion arising, you might want to get a few peers, family members or other housing professionals to read this section to see if they have a thorough understanding.

Details about the rental parties

Every time you draft up a new agreement, you must write all the details about the guests staying there. Doing this makes the agreement relevant to the guests, specifically those staying at the time. To prepare you for this, before booking their stay, you will want to ensure you have their entire full name written down.

Moreover, remember to include their home address, postcode, and contact details such as their phone number, passport, driving license, and email address.

To go an extra step to cover you, it would be wise to include the date that the short-term lease agreement becomes in place, i.e. the first day of their stay. You might want to add the time on, too, if your property has specific time windows for check-in and checkouts.

Duration of the rental

Arguably, this is one of the most crucial sections for your guests when staying at your rental. You will want to explicitly state the dates of their stay, such as their arrival and departure date. Note that if these dates slightly adjust before they start to arrive at your property, you must create a new or updated short-term rental agreement and get them to sign it.

Maximum Occupancy

As a host, you might have witnessed others in your industry have guests trying to get more value for their money. For instance, there are occasions when short-term rentals have more people staying in them than they stated on their initial booking. As an owner, you should avoid this, as you could face major damage and risks to your property.

Therefore, you'll want to ensure that you state the maximum occupancy of your property on your agreement. In addition to this, you must declare how many guests are staying in your property for that duration and the sleeping arrangements. You must also add the fire code regulations in line with your maximum occupancy number.

Doing this right will ensure the guests are fully liable if any unauthorised visitors come to stay and face any injuries or damage.

Access rights and keys to property

This section of the agreement must cover the entry points to your property and how guests can gain access to them. For instance, regarding the keys, you will want to cover the following topics:

Self-check-in

Depending on your vacation rental, you might want to provide them with self-check-in options. You'll want to state the details in this section if guests are arriving late or you're unable to meet them in person. If you plan on doing this, you should state in the short term rental contract the correct place for the keys, i.e. in a lockbox, smart lock or with a reception member.

Key services 

On the contrary, you should be explicit about the rules if you're using a key management service. For example, if you're allowing your guests to check in without a key and just using a code, you must provide thorough instructions on how guests can do that.

Also, how guests can contact you if there are any problems accessing the keys; in addition to this, you must be clear in your agreement on what guests should do with their keys when they check out. Moreover, the charges involved, if guests lose a key and what to do in the event of one being lost or reported stolen.

Rules, restrictions and responsibilities regarding your rental

One of the major points you cannot miss when writing your rental agreement is your house rules for your property. You'll want to state clearly and professionally everything your guests can and cannot do. For instance, anything that's expected of them and potential penalties they might face if they break them.

But when writing the rules, you should take your time to think about the type of guests staying in your home. For instance, will it be families, professionals, teenagers or party like guests? You'll want to write rules around that specific set of guests based on who's staying there. When writing the rules, though, you should be simple as possible and never overcomplicate them.

If you're unsure, here are some things you'll want to cover:

●  Opening message: When writing the rules, you'll want to set the tone for what's to come. For instance, the opening should state why you have specific house rules and why guests must abide by them. The opening message should also state the repercussions of such rules if guests choose not to follow them.

●  Parking: If you have onsite parking, you must be specific about the parking rules for guests. For example, what type of cars can park there, the hours of parking, parking permits and etc

●  Areas off-limits: If you have any areas out of bounds, then you state them.

●  Smoking: You should state whether your property is smoking or non-smoking. You might want to opt for non-smoking, as odours from smoke can seriously damage the smell of your rental.

●  Areas to eat: Not all properties will have this, but you might want to specifically highlight what areas are ok for guests to eat. Doing this might be beneficial for you as an owner, as it could save you on extra cleaning fees, for instance, if there are stains on your bed covers for sofas.

●  Trash: You must state clear rules of how to dispose of the trash and where its collection points of it are. Doing this will ensure your property stays clean and that you don't have a lot of trash to collect when your guest's checkout. 

●  Security: You should inform guests that their belongings can stay safe and secure if they lock the property properly. It would be wise to highlight rules like locking doors and windows before they leave. In this section, it could be good to add reminders about turning off electrics, lights and the air conditioner when leaving too.

●  Damages: If your guests break or damage anything in your property, you should highlight what to do and who to contact. 

●  Parties: You might want to think about having a no parties rule to stop any damage to your property. It will also save you from paying extra money for a renovation and make it a safer place.

●  Noise: Try and implement rules concerning excessive noise late in the evening or when disrupting the neighbours. You might wish to have rules stating set hours where guests should keep their noise to a minimum and penalties that could be implemented if they break them.

●  Laundry: You should let your guests know if you have a washer or dryer in your place; if so, then you should state the rules for using the machines.

●  Pets: You must mention if pets can or cannot stay at your place. If they can, you should be specific about the type of pets that can stay and their sizes. Moreover, if you do allow pets, you might want to charge a bit more than your normal rate. 

Payment information

In this part of the agreement, you must cover everything payment related. For instance, you will want to mention the chosen payment method agreed for the rental rate. You must specify when the payment is due for the property. Some examples are this is upfront, 24 hours in advance or on the arrival of the property. 

In addition to this, you might want to state exactly what is included in the payment and the costs of any other services included in it or what might be optional extras. For instance, if you offer transportation, breakfast, guided tours or anything else, you must also state that too.

Deposits

You should also write about security deposits in your agreement. They're essential to add as it protects you in case any guest damages your property. If any incidents or damage happen during their stay, you can take their security deposit to pay for them.

On the contrary, if there are no damages, you can refund them at the end of their stay. It's important you're specific about these rules and the cost of the security deposit too. You'll also want to conduct some research and ensure your deposit is similar to what guests charge.

Fees

If you want to charge for anything extra, you must be clear about them. When doing this, you must highlight the cost, purpose and the extra fees that you might charge alongside the rent and security deposit.

For instance, if you have any additional fees such as VAT, tourist tax or more, this will be important to mention here. Doing this properly will help save you any complaints or misunderstandings from your guests.

Cancellation

You'll want to mention how your guests can cancel the agreement of your property. Alongside this, you should mention the rules that apply to cancelling. For instance, if they cancel on short notice, they might not get a refund or a full refund. You might want them to submit a cancellation in writing as well, to ensure that you're covered.

Cleaning

In your agreement, you should state if there's a cleaning fee for your property. When doing this, you should provide thorough instructions on how guests should leave your accommodation. You must mention cleaning fees, which can protect you from paying too much for cleaning after your guests leave.

Amenities and Furnishings

You should specifically mention all of the amenities included in your short term rental. In addition to your furniture, you must highlight your outdoor areas, kitchen utensils, first aid kit, toiletries and more.

Liabilities

Irrespective of how well built your property is or the agreement you have in place, there are bound to be accidents or injuries that happen. What you can do to protect yourself is by having a limitation of liability, which can reduce your responsibility in the event of anything happening.

This clause can stop you as a host from having to pay a lot for your guests' injuries. Usually, in this situation, there's a minimum and maximum coverage in place, saving you money.

However, to do this effectively, the clause must be drafted well and to a professional level too. Therefore in this context, it's appropriate you consult a lawyer to discuss, review and finalise your terms. Make sure when doing it, your section covers the following:

●  The limits for your guest to make a claim against you

●  State the losses for every party that agrees on compensation

●  The losses both parties will use and losses that your party is not liable for

Alongside this, you should also have appropriate insurance in place to protect you in case you do have to cover anything outside of your own pocket.

Violation of agreement

You must be clear about the consequences if you or your guests break any point in the agreement mentioned. If your guests do not follow your terms and conditions, you can be specific about having the right to cancel or charge them extra.

Additional clauses

To make your short term rental agreement more applicable to your rental, you should specify extra clauses. Doing this will provide guests with more straightforward instructions on what they can do when staying there and any further limitations. To give you an example of an extra clause, you might want to state only certain areas of your property they can use.

Conclusion

Overall, as a property owner, you must draft up a legitimate short term rental agreement for every new guest that stays at your place. Doing this ensures that your guests clearly understand the rules and regulations when staying in your property.

Moreover, it protects you as an owner from any liabilities or damages. If you're not entirely sure about your agreement, you might want to sit down, draft out the essentials and speak to a lawyer for advice.

FAQS

How to Write a Vacation Rental Contract?

When writing a short term vacation rental contract, it's essential you keep it to the point and simple so there's no confusion at all. The rental agreement must highlight all the vital obligations for you as a homeowner and the guests staying there. Remember to include relevant information like guest details, maximum occupancy, rules, fees, payment, liabilities, amenities, and more.

Why Is It Important To Have A Short-term Rental Contract?

By having a short term rental contract, you'll protect yourself as a property owner. It will help the guests know the rules and responsibilities expected of them throughout their stay. It will protect you as an owner by saving time on cleaning fees and unnecessary expenses to be paid for wear and tear. It will also help protect you legally too.

How long is a short-term vacation rental agreement?

Short term vacation rental agreements can only be for a period of 1 to 30 days. Anything outside that window, is not classed as a short term vacation rental agreement. Instead you will need another type of contract.