Vacation Rental or Lodging Agreement

17 Replies

Hi BP!  I am new to the vacation rental space and I'm looking for a good rental agreement. I've found some templates online from places like Law Depot but hoping to get a strong rental or lodging agreement template from hosts with experience to account for any nightmare guests.  

I've rented to 1800 people without a written agreement.  I just tell them to pay the rent up front. Don't park on the grass or they'll get a ticket. No indoor furniture on the front porch or I'll get a ticket.

Hey Beau!

Share a little more about your short term rental property. Are your guests going to be booking directly with you or via AirBnb, VRBO, booking.com, etc? What type of property is it?

@Chris Mury sure thing! its in Ocean City MD.  We will be doing weekly rentals (sat-sat) in the peak summer season and likely more flexible in the offseason. We are currently up on VRBO (not quite on airbnb yet) and will also do some direct bookings.  Just want to ensure we are covered and know that vrbo allows you to attach your rental agreement.   It is a townhouse that is part of a broader private community which is also governed by certain rules. 

Originally posted by @Beau Ordemann :

@Chris Mury sure thing! its in Ocean City MD.  We will be doing weekly rentals (sat-sat) in the peak summer season and likely more flexible in the offseason. We are currently up on VRBO (not quite on airbnb yet) and will also do some direct bookings.  Just want to ensure we are covered and know that vrbo allows you to attach your rental agreement.   It is a townhouse that is part of a broader private community which is also governed by certain rules. 

Thanks for the feedback. I'm very familiar with the area, we have a family home in Bethany.

I've never used a separate rental agreement outside of AirBnb/VRBO but would certainly use one if booking directly. Maybe talk to other owners in your community or the Realtor who sold you the townhome to see what sort of agreement they use or recommend. Good luck with the new place!

 

@Beau Ordemann I manage a few properties in the Ocean City MD area, and we utilize both VRBO and Airbnb. We have not to date used separate rental agreements. On Airbnb, while you can add one, they don't collect a security deposit up front (you can use the resolution center later), so the hassle of a separate agreement doesn't help much. I would recommend utilizing the house rules to write anything and everything you want to follow, ensure guests read it, and put cost based penalties there. It helps deter the "bad" guests, and helps with resolutions later if the rules were stated up front. Guest have to accept the rules before booking, so they acknowledge the risk and penalties etc. You can collect a security deposit on your own if you like, but its a bit of a hassle right now.

VRBO doesn't have as much of a free written section, but we have also jut used the rules section. VRBO clients pay for insurance or an actual deposit, depending on your settings. This gives you a bit more control on actions if there are problems.

I focus on the fee's and costs, as at the end of the day, the rental agreement is helping protect you from damage, theft, smoking etc. While a piece of paper helps, having a way to collect on the issues if they arise is more important.

Direct, its a different story, as you want to at least have something stating the person(s) are renting the property, how extensive it is will be up to you. I don't have any examples to share currently, as i don't rent direct at this time, unless its known friends / family which is less risky.

Just some thoughts, message me or reply if you have any follow up questions.

@Jason Charlton thank you.  Glad to see a fellow MD investor!

Would love to see any examples of cost based penalties in your house rules.  We are using the $59 damage protection plan - which is recommended by the vrbo platform (guest pays) covering $1,500, but would love any advice on whether that is sufficient protection.    Curious if the Damage Deposit option is recommended (which you set the coverage amount for any damage to the property).  

@Beau Ordemann

I would highly suggest using a rental agreement if it's outside of Airbnb or you are going to be asking for trouble. We did talk to an attorney who told us that guests who book on Airbnb or VRBO are essentially agreeing to a contract. So if it's through Airbnb or VRBO, I wouldn't worry.   

With that said, I’m a licensed real estate agent/property manager so we get our short term rental agreements from our state association. You might be able to get one from a local agent in your area. I have a template if you want, but have an attorney look it over since you are in a different area. You can DM me for this.

You will need advice from local real estate agents or property managers for any extra paperwork or disclosures that are needed because each area can have different requirements.

Also, add the house rules to the contract.

Hope this helps.

Originally posted by @Gi'angelo Bautista :

@Beau Ordemann

I would highly suggest using a rental agreement if it's outside of Airbnb or you are going to be asking for trouble. We did talk to an attorney who told us that guests who book on Airbnb or VRBO are essentially agreeing to a contract. So if it's through Airbnb or VRBO, I wouldn't worry.   

With that said, I’m a licensed real estate agent/property manager so we get our short term rental agreements from our state association. You might be able to get one from a local agent in your area. I have a template if you want, but have an attorney look it over since you are in a different area. You can DM me for this.

You will need advice from local real estate agents or property managers for any extra paperwork or disclosures that are needed because each area can have different requirements.

Also, add the house rules to the contract.

Hope this helps,

 Very well said!

@Beau Ordemann I would agree and say that the advise above on the rental agreement when doing direct is key, attorney reviewed. It provides you the ability to take action if need, against major issues.

For VRBO, I set ours so that the guest has the option, either the non refundable policy for $59 or the deposit. I have seen most guests go with the $59 as they don't want to tie up $1500 on their credit card. In general, I have experienced a better quality guest on VRBO, however Airbnb is the majority of the bookings for us.

For rules on either, keeping in mind these are primarily used to deter bad guests and misbehavior, they will hold up in Airbnb resolutions as long as you provide sufficient proof. Documenting the state of the house before and after each guest is key, so your house keeper(s) are the most critical part of your team. Treat them well, as they make or break your business.

Some example rules, wording could be updated for your listing or specific desires / legal language improved. 

1. Verified identity is required to book, Failure to do so may result in your booking being canceled without refund.

2. No pets allowed – If pets are seen on the property or evidence of pets
being present is found, your reservation will be canceled and you will
be asked to leave the property immediately. You will be charged a $500
fee. (Keep in mind, if a pet is ever to cause damage to your property and yo don't allow pets, ensure not to mention the damage was caused by a pet to Airbnb, it will NOT be covered)

3. No smoking inside of the house – If evidence of smoking is found, you
will be charged a $250 fee. You are welcome to smoke outside, please
keep the doors closed, and do not leave ashes outside.

4. No loud noises after 11PM (Decide on your own penalty, police are quick to respond to noise alerts if your neighbors complain)

5. Additional guests past the reservation quantity are not permitted
without prior approval from your host. If guests past the reservation
quantity are seen without approval, your reservation will be canceled
without refund and you will be asked to leave immediately for violating
occupancy laws.

6. Towels provided are for in home use only, they are not to be taken to
the Beach. Lost or missing towels will be subject to a $15 replacement
fee, per towel. (Write a similar rule for sheets, comforters, pillows etc. if you are providing these as a service)

7. Early Check-in cannot be guaranteed. We will attempt to allow early
check-in if the schedule allows. Late check-out is not allowed, and
subject to a fee of $250 per hour plus any cost incurred by the host due
to delaying the ability for the next guest to check in.

8. Do not place anything other than toilet tissue in the toilets. (Add your own handyman services hourly rate for repairs estimate)

9. Do not place excessive and or large food items down the kitchen garbage
disposal. Do not place any non-food items down the kitchen garbage
disposal. (Add your own handyman services hourly rate for repairs estimate)

10. Property is expected to be left in the same condition it was found. Our
cleaning and turnover staff documents the condition of the property
before and after each check-in/check-out, as well as takes an inventory
of items. If any damage is done, please inform your host immediately.
You will be responsible for the cost of replacement items (damaged,
broken or missing), with an additional restocking fee up to $100 per
item.

Of course you can have more if need, specific to your property. You can also add as you run into certain issues. I have found that having more rules than most doesn't deter guests, as long as they are reasonable requests. I also don't suggest getting to petty if a guest accidentally breaks a glass, but don't let them off the hook for a hole in a wall etc.