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What to Include in a Short-Term Rental Agreement

Learn the key considerations of rental agreements when renting to short-term tenants.
Learn the key considerations of rental agreements when renting to short-term tenants.

If you’re a homeowner considering renting out your property for short periods, understanding short-term rental agreements is crucial. 

These legal contracts govern the relationship between hosts and tenants, ensuring that both parties are clear on the terms and conditions of the stay. 

Whether you’re thinking about renting your home to vacationers, business travelers, or others in need of temporary lodging, a strong rental agreement is vital to protect your interests and provide a clear framework for the rental experience. 

Understanding Short-Term Rental Agreements

It's important to understand the elements of a short-term rental agreement.
Be cautious when renting out your property by understanding your responsibilities as a host.

In simple terms, a short-term rental agreement is the contract between property owners and guests looking to rent their property for a short amount of time–often less than six months. 

Unlike long-term leases, which typically last a year or more, short-term rentals provide flexibility for both parties.

In a short-term rental agreement, the terms and conditions, including the rental rate, security deposit, acceptable behavior, and maintenance responsibilities are defined. 

Short-term rental agreements are commonly used for vacation rentals, temporary housing during relocation, or any situation where a brief stay is needed. 

Regulations and legal requirements for short-term rentals can vary by jurisdiction, so it’s essential to comply with local laws.

» MORE: Airbnb vs. Vrbo Comparison for Hosts

Key Elements of a Short-Term Rental Agreement

It's important to understand the elements of a short-term rental agreement before renting out your property.
Learn the components of a strong rental agreement with these tips.

Before drafting a short-term rental agreement, it’s essential to understand the key elements included in these binding contracts.

Parties Involved

This section identifies the legal names and contact information of the property owner (or property manager) and the tenant. 

It may also include emergency contacts and ensures legal enforceability and clear communication between parties.

Rental Term

The rental term section of the agreement outlines the exact start and end dates of the rental period.

It specifies the duration of the tenant’s stay and is crucial for legal compliance, especially in jurisdictions with specific regulations for short-term rentals.

Rental Rate

This outlines the total amount of rent, due dates, accepted payment methods, and any late fees instituted by the host. 

It may also include details about prorated rent if the rental term doesn’t align with a standard billing cycle.

Security Deposit

This section explains the amount of security deposit required, the conditions under which it may be withheld (such as damages beyond normal wear and tear), and the timeline for its return after the rental term ends.

Cancellation Policy

Knowing and understanding the cancellation policy in a short-term rental agreement is important to avoid disputes later on. 

The cancellation policy will include how much notice must be given by either party and any associated fees or penalties, which helps protect both parties’ interests in case of unexpected changes.

House Rules

House rules are the specific rules and guidelines regarding use of the property. This may include restrictions on smoking, noise, pets, or the number of guests allowed.

It also ensures that the tenant understands what behavior is expected during their stay.

Maintenance and Repairs

This section of the rental agreement defines the responsibilities of both the tenant and the property owner regarding the upkeep of the property. 

It may detail how routine maintenance is handled, who is responsible for minor repairs, and how urgent issues are to be reported and addressed.

Liability and Insurance

The legal responsibilities of both parties in the event of damage to the property or injury on the premises is listed in this section of the agreement.

It lists the requirements for insurance coverage, such as renters’ insurance for the tenant or specific liability insurance for the property owner if necessary.

The liability and insurance clause also protects both parties from potential legal disputes related to accidents or damages.

Fair Housing Compliance

Understanding Fair Housing Laws is crucial for avoiding issues down the line with a short-term rental agreement.
Understanding Fair Housing Laws is crucial for avoiding issues down the line.

Fair housing compliance is crucial when writing a short-term rental agreement. Here’s what you need to know about fair housing to avoid any issues down the line:

Know and Follow Fair Housing Laws

The Fair Housing Act prohibits discrimination in housing on the basis of protected classes like race, religion, sex, familial status, disability, or country of origin. This means you cannot refuse to rent to someone or charge them more based on any of these factors.

Different states and municipalities may have additional protected classes such as sexual orientation, age, or marital status.

Always refer to local laws to ensure full compliance and don’t hesitate to contact a legal professional before renting out your property.

» MORE: Learn More About Fair Housing Laws

Use Neutral Language in Advertisements

Avoid any language that may be seen as preferring one group of people over another. Phrases like “perfect for singles” or “suitable for a young professional” could be considered discriminatory against families or older individuals.

Focus on the property’s features and amenities rather than the perceived characteristics of the ideal tenant. Try to portray why anyone will enjoy staying at your home without trying to appeal to any group specifically.

Apply Rules Consistently

Be sure to apply your tenant screening criteria, deposit requirements, rules, and regulations equally to all applicants. Inconsistent treatment can appear discriminatory, even if it’s not the intent.

Also have a written document outlining your standard operating procedures when evaluating applications from tenants. This will prove you’re not unfairly discriminating if someone raises a dispute.

Make Reasonable Accommodations

If a tenant has a disability, the law might require you to make “reasonable accommodations” to ensure they have a comfortable stay.

This doesn’t necessarily mean structural changes on the property but could include things like allowing a service animal despite a no-pet policy.

You can’t charge extra for these accommodations, and refusing to make them may be seen as discriminatory.

Keep Records

Keeping detailed records of all interactions, applications, and decisions can help protect you if a discrimination claim is filed.

Include notes on why a particular applicant was accepted or rejected. If the decision is consistent with your established criteria and not based on any protected class, these records can be evidence in your defense.

By adhering to these principles and being aware of how they apply specifically to short-term rentals, you’re ensuring your practices align with fair housing laws and protecting yourself from potential legal issues. 

Dispute Resolution

Learn how to protect yourself in case of a dispute from an unhappy guest with a solid short-term rental agreement.
Learn how to protect yourself in case of disputes from unhappy guests.

Unfortunately as a host, renting out your property comes with the risk of unhappy guests opening a dispute after their stay.

Some common reasons for disputes may include complaints about cleanliness, neighbors, maintenance issues, or poor communication from hosts.

It’s important to understand how to resolve disputes with your guests professionally while also protecting your interests as a host. Here are some ways to do this:

  • Communicate Clearly: Begin by directly communicating with the tenant. Understand their grievance and present your perspective.
  • Review the Rental Agreement: Go through the rental agreement or contract that you and the guest signed before their stay. Highlight any clauses that might be relevant to the dispute.
  • Gather Evidence: Collect all relevant evidence that could support your position, such as photos, emails, receipts, or any other documentation.
  • Attempt Resolution: Offer a fair solution based on the facts and the rental agreement. This could include a partial refund, a future discount, or any other appropriate action.
  • Contact Platform Support: If the rental was made through a platform like Airbnb, engage their support or resolution center to handle the dispute.
  • Seek Legal Advice: If all else fails, and the dispute is of significant value or complexity, consult with a legal professional in your jurisdiction to understand your rights and options.
  • Document Everything: As we mentioned previously, keep a detailed record of all communication and actions taken before, during, and after the dispute was filed. This allows you to represent your case fairly and accurately.
  • Act Professionally: Maintain a calm and professional attitude throughout the process. Emotions can escalate a dispute, so staying composed can lead to a more satisfactory resolution.

Disputes are inevitable when renting to short-term tenants, and you’re likely to face a few if you decide to rent out your property.

However, using these tips, you’ll be in the best position to resolve disputes fairly and professionally with your guests.

» MORE: 7 Tips on Successfully Renting Out Your House

Legal Considerations

Learn about the legal considerations when drafting a short-term rental agreement.

When writing a short-term rental agreement, it’s essential to consider various legal aspects to ensure that the contract is enforceable, fair, and compliant with the law.

Here are some legal considerations for property owners:

Clear Terms and Conditions

It’s important to clearly define the terms and conditions for your rental. Cover important elements such as the total cost, payment schedule, and accepted methods of payment.

Clear terms and conditions also include stating the responsibilities of the host and tenant, including upkeep, damages, and adherence to the rules of the property and community.

Occupancy Limits

Hosts should set a clear limit on the number of guests allowed to stay in the property and the consequences for breaking these terms. This may include additional costs or termination of the agreement.

Pets and Smoking Policy

If pets are allowed, state the types, sizes, and any associated fees or deposits needed when bringing pets to the property. Specify in the agreement if there are any areas where pets are restricted, such as rooftop decks or docks near bodies of water.

It’s up to you whether to allow smoking or not. Most hosts prefer no smoking inside the house, so be sure to specify that in the agreement. Additionally, include the consequences for violating the smoking policy.

House Rules

Similar to the terms and conditions, hosts need to provide clear guidelines on house rules and conduct during the guests stay. This includes noise restrictions, proper use of amenities, and drinking alcohol on the premises.

The Bottom Line

Short-term rentals can be a great way for property owners to make passive income with their real estate investments.

However, it’s important to understand how short-term rental agreements work so you can protect yourself if disputes arise.

With laws and regulations varying by location, we recommend consulting with a legal professional in your jurisdiction to ensure that your rental agreements are comprehensive and in line with local requirements.

Related: 5 Best Short-Term Rental Sites for Hosts and Guests

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