We had a guest squatter in our vacation rental!

[Sebastian Giraldo]

Covid-19 has changed life as we know it for sure, and that is the reason why so many companies and services have developed different and new ways to provide the best to their clients even when it means walking on a new path, considering options that weren't on the table before and being more flexible on the processes. Unfortunately, when we did our best to be a light for those last-minute responders and others stuck without entry into their country of origin due to the international lock-down, an individual took advantage of our good intentions.

On April, we experienced the toughest month industry-wide and for our company as well. Like many other hosts, we took action, lowering our nightly rates and betting for lengthy stays. We identified a need for first responders, locals needing to quarantine and travelers who happen to prolong their stay due to traveling restrictions. Therefore, the larger homes we manage made all the sense for a 2 week or more quarantine discount and we decided to move in that direction. We made our screening process more flexible, which did not require the guest to sign a rental agreement before their check-in.

At one instance there was a lady interested in one of our properties, which later became a booking. At that point, everything was typical but when her check-out date was arriving, she requested an extension that we gladly processed directly avoiding service fees. Little did we know our nightmare was about to start.

Unlike other hosts, we process direct bookings, and this was a loophole our squatter exploited to get away with it. We first processed her reservation through booking.com and eventually handled the extension directly. She extended her stay a couple more times until we received notifications her credit card had no funds.

We didn't panic since it could happen to anyone. Once we communicated with the guest asking for explanations, she told us “I am not paying anything, you will have to do an eviction.” She refused any phone, text, or face-to-face communication, giving us no chance to negotiate.

We called the police on-site several times to help us vacate the guest squatter, she insisted she was a tenant paying month to month, huge red gag. Nevertheless, under Florida law and police officers, the situation must be taken as a civil matter, which required us to file a residential eviction with the courts. The cherry on top was on April 2nd Florida's governor ordered a 45-day suspension of all evictions and foreclosures due to the non-payment of rent related to the COVID-19 emergency. The guest squatter knew this and exploited it!!

Typically, if a guest lawfully stays on the premises for more than 30 consecutive days, they acquire legal tenant rights (depending on the regulations of your state). According to these right, the landlord cannot do things like cutting off the power or changing the locks since it is against the tenant rights and possibly giving her arguments. Evicting a guest at this point could only be done through a formal eviction process via the lengthy court process.

You might be wondering: Why did it take you so long to figure out the credit card was fraudulent? Did you notice something strange in those recurrent extensions? The software we were using to verify the payments, took a week to corroborate its trustworthiness. We didn’t find anything suspicious at the moment because everything seemed to be OK with the credit cards. However, our rush to increase occupancy kept us apart evaluating our weaknesses and risks.

When you lower the prices as much as the market did during the spike of the pandemic, you open the door to problematic guests. If you do so, you should improve your screening process, and include other guarantees such as a rental agreement form and a security deposit or a contingency plan for problematic guests or tenants which at that time, in midst of chaos, we didn’t.

Before this event, the property was performing exceptionally well netting over $10,000 in the earlier months of 2020. With this in mind, it impacted our business with an incredible amount of work hours dedicated to working with attorneys and courts to process the eviction. Overall, we can estimate a financial loss of over $30,000.00.

Since the incident, our procedures changed tremendously. We are definitely more cautious, since this unexpected situation not only affected us, it also impacted our relationship with partner owners and the trust and commitment we have built with them over the years. After this meaningful experience, we improved our screening process, requiring verification and identifications, the signing of a rental agreement, and security deposits.

We also enhanced our check-in process securing all our properties entry with more sophisticated keypads.
In regard to technology, we acquired a real-time verification payment gateway. We also started using more features from our channel manager to make our booking process and transactions more secure.

Use these tips to protect yourself against potential guest squatters! Specially now in this second uprise of COVID cases.
- Be careful with direct bookings.
- Do not use a payment system that has a delay in authenticating transactions.
- Be very selective with guests extensions.
- Have your guest acknowledge your house rules and always have a security deposit. (we implemented an easy CC hold, to avoid transaction fees)
- Do not give access to the property until ID verifications, CC hold, an agreement signed, and of course payment has been confirmed.
- The rental agreement should clearly state that the property is a vacation rental property and that they agree to check-in and check-out date.


I'm interested in knowing if you've ever experienced a situation like this before? How did you manage the situation?
Is this a fear that you face when you considered using your home as a vacation rental?
What do you think about being flexible under these circumstances, if you have what features have you implemented?