Thanks to the rise of platforms that encourage people to rent out their second homes to tourists, there’s been a sharp increase in people leasing their homes to tenants for a short period. When it comes to renting out a property, there needs to be a process to ensure that there is complete transparency, and the interest of both parties is safeguarded. In such cases, one has to draft a short-term rental agreement. But what should this include?
What is a short term rental agreement?
A short-term rental agreement is an agreement between a landlord/homeowner and a tenant. Also known as vacation rental agreement, this agreement allows property owners to lease their property to a tenant for a short period. The typical range is between 1 day to 30 days, but it can extend to as long as six months in most cases.
A short-term rental agreement lists all the responsibilities and duties of both the tenant and the property owner. These may include several details, such as amenities provided and rules based on local laws. A short-term rental agreement is typically done for higher-end vacation properties. The agreement must follow all applicable state laws, and if the housing structure was built before 1978, it must be furnished along with the Lead-Based Paint Disclosure Form.
Why do I need a short term rental agreement?
A house is a financial asset, and an important one, too. As a homeowner, you have to ensure that your asset is safeguarded in the hands of strangers. As mentioned earlier, a short-term rental agreement lists out all the responsibilities of the homeowner; this protects them from any false claims made by the tenant. It also lists out the duties that a tenant has to perform while staying in a particular property. For instance, the agreement will specify that the tenant cannot perform any illegal activities on the property along with any other restrictions that a landlord may choose to impose.
This ensures that the homeowner is free of any liabilities if something does go wrong. At the same time, it also spells out certain tenant rights such as the right to privacy, their stay duration, and the amenities that they have access to.
Things To Include In A Short-Term Rental Agreement
While the base of the short-term rental agreement is similar to that of other rental agreements, some details must be mentioned while drafting a short-term rental agreement.
The basic details that have to be mentioned are:
- Start and End Dates;
- Rent ($);
- Property Address (full description)
- Amenities (Wifi, kitchen appliances, Cable TV, etc.);
- Maximum Number (#) of Guests; and
- House Rules
However, an excellent vacation rental agreement does not shy away from diving into the deep end. It’s best to keep the contract as detailed as possible to ensure that both parties are well-aware of all the terms and conditions. This also leaves little to no room for any miscommunication or misunderstandings.
Rental Property Details
The rental agreement has to mention all the details regarding the property. These details include the address, rooms, layout, guest capacity, different facilities that the guests have access to during their stay, etc.
In today’s vacation rental scenario, guests expect hotel-like services with vacation homes. In the rental agreement, one should specify the amenities provided at the property, as well as the ones that are not available. These typically include cleaning schedules, food/coffee, pick-up, and drop, etc.
Security Deposit Guidelines
Security deposits are collected by the property owner before the duration of the stay to pay for any damage caused during the rental period by the tenant. This amount is returned to the tenant after the stay if there is no damage to the property. One must refer to the state law to determine the maximum permissible security deposit amount.
The most important aspect of a rental agreement is the rent itself. A contract should lay out the details of all payment-related information. This includes the lease, the payment method, the date of payment, etc. The general rule of thumb is to be as specific as possible.
For example, the agreement should specify the exact payment method, whether it’s cash or any other form. Similarly, it should also include any ‘late fees’ if the tenant fails to pay the rent on time. This avoids any hassle or misunderstandings during the payment period.
Tenant Contact Information
The rental agreement has to mention all the relevant contact information of the tenant. This includes name, contact number, address, email address, etc. A short-term rental agreement also states the exact amount of people allowed to stay on the property. It is best to include all their details in the rental agreement as well.
Just as a tenant enjoys various rights during their stay, they are also obligated to perform several duties. For example, basic cleanliness, following the basic house rules, etc. The agreement should also mention various regulations regarding smoking, pet access, illegal activities, etc. It is a good idea to include all local laws, rules, and regulations in the agreement to ensure maximum transparency.
Tenant Rights and Cancellation Terms
Since the short-term market is fast-moving, there is always the possibility of a cancellation. Therefore, the agreement should include all the rules and regulations about the event of a cancellation. This protects the interest of both parties and ensures that the tenant has the right to cancel and make the proper payment.
Find properties that are great for short-term rentals at Zumbly.
How binding is a short term rental agreement?
A short-term rental agreement is just as binding as any other agreement as long as it honors the local, state, and federal laws.
While it may seem unnecessary or a waste of time to draft a short-term rental agreement, it is well worth the time and effort for legal purposes. It protects both parties, ensures that everyone involved is being treated fairly and that there is a written understanding of all the services provided during the stay. By doing so, the tenant has a pleasant experience, and the homeowner is assured that their property is well taken care of. Now that you know more about short-term rental agreements, find the best properties to rent out with Zumbly’s home score and calculator.
Related: Apartment Investing 101