Future/status of STR property management contract when unit is sold?

Question

Andrew Steffens · Answer

Awesome, best of luck!

There is nothing they can do to you or your property only to the seller.  I honestly would not even honor 1 booking from them as if there are any issues during that time period it may be very difficult to get any assistance from them.

Michael Smythe · Answer

This is always an interesting discussion.

Leases for tenants traditionally remain in effect through change of ownership.

PM contracts typically end with change of ownership.

Why the difference?

Seems like Vacasa is trying to go against the grain.

Brooklyn McCarty · Answer

Be sure to have your lawyer read over it

Shawn McCormick · Answer

I've handled this a few times with buyers and Vacasa. A couple of times the revenue from future bookings made it worthwhile since my buyers were concerned about generating cash flow from day one, so they kept what was in place and submitted a cancelation on day one. That gave them the 90 days to create their own marketing plan and have another PM in place to book out after the 90 days was up.

Another scenario was that we negotiated the price with seller to cover the costs of canceling the bookings in place, which worked out for both sides.

If there is not enough revenue past just a few bookings, make sure you have an addendum signed that you have no intentions or obligations to the seller's current contract with them. That puts any cancellation charges back on the seller.

Ben Pileggi · Answer

Hey Michael,

We ran into the same problem in the past. I am not an attorney and I am not providing legal advice but happy to share our experience.

We had an attorney review our docs and they confirmed we had no commitment beyond close. The agreement went with the seller, not the property. Yes, you'll need to start over with a new listing but it's completely worth it imo. All upside from there!

We are located in northeast Florida and offer full-service Airbnb property management. I'd be happy to offer a free property analysis and tell you more about our company. Where's the property located?

Ben

Joe Fish · Answer

I can’t answer this question, but wanted to mention Avery Carl covers this and similar STR property transfer issues in her book on Short Term rentals. Might be worth getting ahold of a copy. Sounds like it can get pretty messy.

Michael Green · Answer

My understanding of Vacasa's contracts in general is 90 days and if you terminate it you owe any booking fees and any costs they take to move the guests (ie, to a higher rate property).

The seller is aware of this, and I've told them to tell Vacasa to stop taking bookings on it as I don't intend to continue using Vacasa.  Seems they did not do that <shrug>.

The prop is up the coast from you - Fort Walton Beach area.

Andrew Steffens · Answer

Depending on how it is written (and how I would look at it as a FL based PM) is the contract is terminated once the property sells.  Vacasa cannot force you to stay on based on the agreement the previous owner signed.  There likely is a penalty in the contract that could be applied to the owner for not giving the proper notice to Vacasa.  Vacasa then has the right to exercise the penalty of waive it.

Curious where in FL is the condo?

Future/status of STR property management contract when unit is sold?

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