Legal Requirements to Manage Short Term Rentals

[Austin Hughes]

Hey, BP Fam! :)

As I've discussed in another post, my mother and I are getting a short term property management company going in Houston. It will be similar to hospitality services.

What requirements do we need to comply with to stay on the legal side of things?

[Mario Tavares]

Hello Austin. 

You definitely need a license, unless you are operating your own property.

You will need insurance (E&O, Umbrella to name a few) for risk management.

If you are holding deposits, you'll need a Trust Account.

You'll need Tenant Criteria i.e. Who do you and don't you want to lease too.

You'll need written contracts (Lease, Property Management, Contractors, etc.)

You'll need a Maintenance Plan, Management Plan and Marketing Plan.

You'll need a Tenant Retention plan i.e. How you deliver good Customer Service.

These are the general items that a good Property Management company should have, but there are other things to consider like process and procedures for On-boarding, Security, Make-Ready, Bookkeeping, Payments, Reporting, etc.

FYI, these are all keeping you on the legal side of things before potentially being sued and during potentially being sued.  If you comply with these operations/process and procedures, it will always be business as usually.

God bless to you and your mom, have fun in business!

P.S.  I know it's your mom, but to understand the details of this business relationship regarding who does what...Don't forget your partnership agreement.