A Vacation Rental Agreement is a legally binding contract between a Host (lessor) and a Guest (lessee) explicitly tailored for the short-term renting of a property. It contains detailed information to ensure the Guest and Host understand all of their contractual obligations.
A short-term rental agreement is typically used for rentals between one (1) to thirty (30) days long.
Why Use a Short-Term Rental Agreement?
There are many reasons to use a short-term rental agreement. A rental agreement geared specifically toward short-term rentals often involves renting a fully furnished home and one in which you may even live at during a portion of the year.
- Highlight Items Unique to Short-Term Rentals. Instead of using a standard lease, a short-term rental agreement can provide specific details on items that are unique to the property type. The agreement can provide details on dealing with things such as personal possessions left behind by a Guest or the location for the pick-up and drop off of the keys.
- Protection. A short-term rental agreement protects both the Host and the Guest if there is a discrepancy or dispute. This could be protection for the Host if a Guest damages the property or protection for a Guest if the Host does not timely turn over possession of the property at the beginning of the Rental Term.
- Expectations of Parties. A detailed agreement can help ensure that both parties are clear on the expectations of the other party and can be the difference between a positive experience and one filled with confusion for the Guest.
- Only Host Suitable Guests. The terms of your agreement should inform individuals of the type of guest you are looking for. For instance, if a property has quiet hours at 8:00 PM, this could deter a group of college students on spring break from renting the property.
- Payments and Fees. When renting a vacation property there may be various required payments, taxes, and fees (e.g. pet fee). You may even have optional add-ons such as a linen package or use of the rental property’s golf carts. Having a proper agreement in place allows you to detail all charges as well as how and when they will be paid.
- Required by law. Some states, by law, require a written contract for short-term stays.
What to Include in a Vacation Rental Agreement
Renting out a property short-term is different from other types of standard rental agreements.
Essential Lease Terms and Conditions
- Date. The date the contract is signed. This is not the date that the Rental Term actually begins.
- Parties. This will include the Host and all Guests that will be bound by the agreement. It is also recommended that you include the mailing address of all parties to the agreement.
NOTE: Typical lease agreements contain the term “Landlord” and “Tenant.” For Vacation Rental Agreements “Host” is the equivalent of “Landlord” and “Guest” is the equivalent of “Tenant.” These terms mean the same things and are simply terms of art.
- Property. Include the full property address of the house at the beginning of the agreement. You may also want to include more specific details such as the number of bedrooms and bathrooms and any other unique areas that are part of the house (e.g. pool).
NOTE: If there are common areas shared with other residents (e.g. community fitness center, tennis courts, etc.), you will want to list them as well. If you do not want to list them in this section, you can list common areas in an attached “Inventory and Amenities” addendum (see Section 16).
- Vacation Rental Term. The Rental Term should provide the date and time a guest can check in as well as the date and time that a guest must check out.
- Payment. It’s helpful to provide an itemized breakdown of all charges the Guest is responsible for paying. This section should also include the specific payment terms, deposit requirements, and acceptable payment methods.
- Security Deposit. A security deposit is a reimbursable deposit used to protect the Host in case a Guest violates the lease or causes damage beyond normal wear and tear to your property. If required, include the amount of the security deposit as well as what items can be deducted from the security deposit. You should also include the timing of returning the security deposit to the Guest.
- Excessive Cleanup. This clause is distinct from any basic cleaning services you may perform at the end of a Rental Term. This clause protects the host if the Guests left such a mess that the Host must conduct a deep clean of the property.
- Smoking Policy. Indicate whether or not smoking is allowed and, if so, what areas guests may smoke.
- Occupancy Limit. Include the maximum number of people that can stay at the property. This section can also be specifically tailored to the particular Rental Term by listing the number of adults, children, and babies that will be staying at the Property.
- Pets. This section should indicate your pet policy. If you allow pets your agreement should indicate what type of pets are acceptable, how many, their maximum weight, and if there will be a pet fee. If there is a pet fee the Host should indicate whether it is refundable or not.
- Utilities. The Host should list any standard utilities they do not provide. Typically, most vacation rental properties will provide all available utilities.
- Trash Disposal. Specify how Guests should dispose of their trash during their Rental Term. If you want Guests to bring out the trash or recycling during collection days then include the specific collection days in this section.
- Quiet Hours. This section will indicate whether or not there are quiet hours. If there are quiet hours this section should also specify what those specific times are and what’s not allowed during this time.
- Parking. In this section inform the Guest whether or not parking is included. If included, provide any necessary details such as the number of parking spaces and where those parking spaces are located.
- Keys. Provide the Guest the location where they are to pick up and drop off any keys needed for the vacation rental. If access to keys requires a password or combination, it is recommended that you do not provide this specific information in the agreement. You can provide this information directly at a time closer to check-in.
- Inventory and Amenities. It is recommended to include, as a separate attachment, a list of all inventory (e.g. furniture, TVs, etc.) and amenities (e.g. WiFi, air conditioning, etc.) that are included with the vacation rental. The clause is simply to reference the attachment so you can incorporate it into the agreement. It could be helpful for numerous reasons, whether to make the Guest aware of what will be provided at the property or to protect the Host in case anything goes missing.
- House Rules. Another attachment you should include and reference is a list of house rules. While it may be tedious to include separate clauses dealing with every detail (e.g. emptying the dishwasher before check out) it will be helpful to provide a separate list of rules to make sure the property is returned in good condition.
- Person of Contact. For this clause indicate whether the Host has a manager on the property and provide their contact information. If not, indicate that Guests can contact the Host for any emergency or maintenance request.
- Subletting.Indicate whether or not you will allow the Guest to sublet (grant license to other individuals to use) your property or not.
- Move-In Inspection. This section instructs the Guest to inspect the property upon checking in and notify the Host if they observe any obvious damages.
- Host Entry. There may be a time when a Host will need to enter the house the Guest is renting. Make sure you have a clause that highlights the amount of notice you will provide Guests as well as the reasons you are allowed to enter the property.
- Maintenance and Repairs. Informs the Guest of their responsibility for maintenance and repairs of the property if a Guest causes any damages during the Rental Term.
- Quiet Enjoyment. The Host promises to ensure that the Guest will be able to peacefully enjoy the use of the Host’s property. This clause also requires the Guest to ensure that their neighbors can peacefully enjoy the use of their properties as well.
- Liability. You should detail the liabilities for both the host and the Guests.
- Attorneys’ Fees. This clause requires Guests to agree to pay the Host’s attorney fees if they violate the agreement and the Host is required to take any action as a result.
- Use of property. For a vacation rental, the property should be for residential use only and should explicitly prohibit the Guest from using it for any type of commercial activity.
- Illegal Activity. This clause informs the Guest that any illegal activity is grounds for termination.
- Possessions. This section will detail what the Host will do with any personal possessions that have been left behind by any Guests.
- Hazardous Materials. This clause prohibits Guests from having certain dangerous materials in any portion of the property. Specific exceptions are provided for items needed for cooking or operating an appliance located on the property.
- Cancellations. This clause should provide a specific number of days before the start of the Rental Term in which a Guest will not receive any of their payments back for cancellation.
- Refunds. This clause will protect you in the event the Guest is not satisfied with their stay or leaves early due to matters that are outside your control (e.g. weather or natural disaster). Refunds are typically not provided if the Guest’s stay was impacted by events outside of the Host’s control.
- Notices. This clause indicates where all notices should be sent for both the Host and Guests.
- Possession & Surrender. This clause lays out both the right of the Guest to possession of the property at the start of the Rental Term as well as the obligation to surrender the property at the end of the Rental Term.
- Joint and Several. All guests are liable for the actions of any other guests. This clause holds all listed guests liable for the actions of any other Guest.
- Lead-Based Paint Disclosures. This clause will indicate whether or not the vacation rental was built prior to 1978. If built prior to 1978, there is a requirement for the Host to provide a Lead-Based Paint Disclosure.
- Governing Law. This will indicate which state’s laws will govern the agreement.
- Waiver. This section explicitly states that just because a Host does not properly enforce any part of the agreement it does not mean that any other part has been waived.
- Additional Provisions. There may be clauses you want to include that are specific to your vacation rental property. Our template provides a section to insert additional provisions.
- Severability. If any provisions are determined invalid, it does not impact other valid provisions.
- Entire Agreement. The Vacation Rental Agreement and any attachments are considered the complete agreement. Any prior negotiations or understandings, written or oral, are null and void.
- Signatures. Signatures are required from both the Host and listed Guests. These signatures are what make the agreement officially binding.
Additional Clauses & Optional Lease Terms
- Vacation Rental-specific Requirements. Renting a vacation property is a rental-specific situation. Make sure you highlight any specific aspects of your vacation rental that you want to address with the Guest. This could be anything from swimming pool use to additional items provided with the vacation rental (e.g. beach chairs).
- Minimum/Maximum Stay Requirements. Some Hosts may want to include a standard clause to inform potential guests of their required minimum and maximum stays. This may help prevent a high turnover of guests or guests from overstaying their welcome.
- Scam Bookings. Some hosts may want to include a specific clause that terminates the agreement if the property were booked with false information or with any intent to violate its terms. For instance, if a party indicates there will be only 2 guests but it is later determined that a greater number of guests are planning to stay at the property during the Rental Term, a Host can immediately terminate the agreement.
- Insurance. You may want to include a clause that informs the tenant that they should obtain trip insurance in the event they have to cancel their reservation or incur any losses. If included, this clause should be located right after the Cancellation clause so that Guests are aware at what point they will no longer be able to receive a refund from the Host.
- Additional Available Services. If you include additional services as part of a Guest’s stay (e.g. guided tours, transportation, breakfast, etc.) you can include the specific details for those services.
To avoid confusion, it’s a good idea to have a separate cover page listing the disclosures and addendums that are included.
Legal Considerations for Short-Term Rental Agreements
There are some legal issues you should consider when preparing a short-term rental agreement. Those include:
- State and Local Laws. Certain sections may need to be specific to your state or local laws. It is important to know these laws to ensure compliance. Certain locations may prohibit certain short-term leases, require additional taxes, or have specific rules that must be followed. You should discuss these issues with an experienced local real estate attorney.
- Third-party Sites. If you are listing your vacation rental on a third-party site (e.g. Air BnB, VRBO) then you must make sure the lease complies with any terms you agreed to with the third-party company.
- Tax Considerations. Hosts must be aware of the IRS rules when renting out a property as a short-term vacation rental. While there are certain tax exemptions, it is important that you know your responsibilities. Also, keeping copies of the agreement and all related financial documents will be important when it comes time to report your rental income to the IRS.
Make sure you seek the advice of an experienced real estate attorney if you have any specific legal question or if you are unfamiliar with any included legal terms.
Executing the Lease Terms
After all parties have reviewed the contract:
- Sign. Depending on a Guest’s financial history, a Host may require a cosigner. With the unique nature of vacation rentals, Guests will likely not be in the same area as the Host to sign in person. Typically, signing and sending the document electronically is acceptable.
- Send/Receive Payment. The Guest must make sure that they provide the Host with any payments agreed to before the start of the Rental Term.
- Prepare the Rental. The final thing you want to do is make sure the Guest has an enjoyable stay during their Rental Term. That means doing the following:
- Provide a clean vacation rental property
- Be available and responsive to any questions, especially on the Guest’s check-in and check-out days.
- Anticipate needs and questions