Vacation Rental Agreement

Vacation Rental Agreement

A Vacation Rental Agreement is a type of lease entered into between a landlord and a tenant for a duration (lease term) not less than one day and not more than thirty days. It outlines the terms and conditions of using the property for vacation.

A vacation rental agreement will typically be used by owners of high-end property such as vacation homes, summer homes, cabins, and any other residential property not designated for long-term (year-round) occupancy. A vacation rental agreement binds the involved parties to the contractual obligations set out in the lease, and any violation (breach) is subject to penalty or legal action. The vacation rental agreement must meet all applicable state laws. In addition, it cushions the property owner from any uncalled-for events such as disputes during the lease term.

Vacation rental agreements are state and property-specific, meaning the terms and conditions outlined in each agreement will be diverse. It is crucial to use a vacation rental agreement anytime one has to rent out space to guests and friends, even if it is just for a night; the length of stay should not influence the decision to use a vacation rental agreement. 

A vacation rental agreement is alternatively referred to as;

  • A vacation lease agreement
  • Short-term rental agreement
  • Guest rental agreement
  • Vacation rental short-term lease agreement
  • Vacation lease agreement
  • Summer rental agreement
  • Short-term house rental contract
  • Short-term residential lease agreement

Short Term vs. Periodic Lease

Short-term and periodic leases are meant for furnished spaces being leased out temporarily. Typically, the rental rates of these two types of leases are higher than those of long-term leases.

However, despite their similarities, they are different in the following aspects.

AspectShort-termPeriodic
Lease termIt has a fixed end date (fixed term) which is equal to or less than a monthIt has no set end date (unspecified lease term). It is typically renewed after the specified period, which could be week-to-week or month-to-month, until either party chooses to terminate it.
Rent pricesIt has high rental prices than standard leases.It has higher rental rates than short-term leases, for one can terminate the lease with minimal notice.
Property typesIt targets vacationers (tenants on vacation or short stays)It aims to accommodate tenants who wish to stay within the locality for a short or unspecified period.

Renting Out a Vacation Home

The process of renting out a vacation home is systematic. There are steps that a property owner can employ to ensure that they find worthy tenants and carry out a law-compliant and beneficial lease transaction.

These steps are as follows:

Determine local laws/ ordinances

As a property landlord, the first step should be to familiarize oneself with state, federal, and local while governing the entire process. Legislation has become necessary due to the need to regulate and tax vacation property leasing. Renting out of private residences for short-term or vacation has proven to be a venture with more than average returns on investments.  Since these laws will differ from one area to another, one can consult a local real estate attorney or agent as their profession places them in a more informed position in such matters.

Prepare the property

Tenants are customers in such a transaction, and the space they wish to rent should be made such that it meets or at least gets close to their expectations. Like any other customer, they want value for their money and hence the justification for preparing the property is the second step in renting out property.

  • Set a timeframe– It is the landlord’s responsibility to determine for how long the property will be up for lease beforehand to approve applications that fall within the timeframe. This ensures the landlord does not inconvenience prospective tenants.
  • Amenities and services Amenities and services improve the quality of the tenant’s life. These items and services act as incentives for potential tenants boosting the property’s appeal and consequently demand in the market. This means landlords can fetch a higher price for vacation homes with amenities than those with no amenities.
  • Determine the tax implications– Leasing private residence for vacation is an income-generating business, and as a result, under certain circumstances, landlords are taxed. The IRS states that private residential property that rents out for more than fourteen (14) days in a year is liable to taxation and is referred to as a vacation rental property by the same criteria. On the other hand, property leased for fourteen days or less is tax-free and is regarded as a personal residence under the same merit.
  • Clean the space and take pictures– Next, the landlord should clean or assign another person to clean the house. Everyone wants to live in a clean place, and cleanliness is usually a big consideration for tenants. Once the place has been tidied up, take clear and quality pictures that present the premises as a suitable place to rent. Potential tenants want to see the views, features, interior décor, landscape, and other aspects of the feature before renting spaces. The best way to show the tenants these aspects is using pictures. Unfortunately, quality and professional pictures will commonly come at the cost of $200 to $2500 depending on the property size and the charging rate of the photographer.

List the rental

The third step in renting out vacation property is listing the property to seek tenants. A description of the property and rent amount should be declared in the listing. There are multiple apps and websites one can use to list their property. These platforms simplify the entire process and increase one’s reach to the target audience at a cost. One should select a platform that best suits their needs.

Market the property

The next step is marketing the property. Some landlords opt to use a real estate agent while others market the property themselves. Agents ease the workload for the landlord, but it is important to ensure they are licensed and be ready to part with some money through agent fees which are usually a percentage of the total rental amount. For those marketing the place themselves, social media such as Facebook and Instagram are tools proven to be effective with this process.

Verify and approve tenants

It is a matter of time before requests from interested tenants begin to trickle in, and that forms the base of our fifth step; verifying tenants before approval. Always keep in mind they are strangers, and their interests and personalities remain unknown unless one takes time to verify them. When it comes to vacation rentals, the applicant’s financial ability is often not a source of concern as they are usually required to pay upfront. Landlords using third-party websites can review applicants’ profiles and use their personalized criteria to vet applications. In addition, reviews from previous landlords on the website can be checked to see how the applicant fairs as a tenant. Social media profiles such as Google and available public information are alternative means of vetting tenants. Unfortunately, most people do not agree to a background or credit check for a vacation rental application.

Finalize the reservation

Once the landlord deems the tenant suitable to rent their property, they can approve the application. Once approved, payment should be disbursed to the landlord if a third party was used, or the tenant should pay through available means such as PayPal, etc. If no third party was used, payment should include a security deposit for property owners, especially those with valuables within the premises, to cushion them in case they get damaged or go missing within the lease term.  With third-party websites, payment is often automatic upon acceptance of the reservation. Caution is issued to landlords who choose to accept payment in cash after the tenant takes occupancy. Once the tenant checks in, they are tenants of the property under the law. Eviction laws are to be followed if it becomes necessary to evict the tenant due to failure to pay. A process that is time and money-consuming and can take as long as 90 days.  

Meet the tenant away from the property

The next step of the process should be to schedule a meeting with the tenant outside the property. In this way, one can reaffirm what is set out in the vacation rental agreement to the tenant and find out more about them.

Check-in and check-out

Once payment has been received, check-in and check-out is the last step of the process. It is expected that the rental agreement outlines the check-in and check-out dates and time of the tenants. Key handover can be in person or automated. Whichever method, the vacation rental agreement should declare how the tenant is to gain access to the premises. Then, as the landlord, one can welcome the guests to answer further questions and usher them in.

Normally it is wise to have a check-out process. However, it should be simple, clear, and quick to carry out; the last thing a landlord wants is to have their tenants undergo a taxing process that removes the sweet memories made during their vacation. In addition, the vacation rental agreement should state if early check-in or late check-out is allowed. If one’s property is normally booked back-to-back, imposing a penalty for late check-out can motivate tenants to be time observant when renting property for vacation.

How to Write a Vacation Rental Agreement

Vacation rental agreements ought to be written and structured formally. However, this does not imply that vacation rental agreements are similar. There are fundamental components of a vacation rental agreement that must appear in a standard vacation rental agreement.

This section will provide a step-by-step guide on how to write a vacation rental agreement below.

Date and parties’ information

The first item the vacation should address is when the agreement was entered and that the agreement binds the parties. Like all legal agreements, it must be dated for reference and to make it effective. The date should be written declaring the day, month, and year. Next, both the tenant and landlord’s official name(s) and mailing address are to be provided. Names should be as they appear on legal records, and the address should be specific (state, city, zip code, and street address). 

Description of the rental

Secondly, the agreement should describe the property such that the prospective tenant can get a clear idea of what is being offered without having to see the space physically. Therefore, the description should give details such as the number of bedrooms, size, location, etc. Location is imperative for two reasons, different regions have different laws, and its location will mostly influence the desirability of a place for vacation. Therefore, its exact location (city, state, street, zip code) should appear in the agreement.

Rental term

As earlier mentioned, vacation leases have a specified lease term. This means the arrival and departure dates are specified, and tenancy is expected to last for that duration only. By providing the day, month, year and time the tenant will move in and out of the premises in the vacation rental agreement. Ensure time is specified whether it is “AM” or “PM.”

Amenities 

The agreement should then show the available amenities. Amenities can be defined as elements of comfort and convenience within the property. They include;

  1. Running water
  2. Electricity
  3. Linens and towels
  4. Cable TV
  5. Number of beds
  6. Kitchen essentials like fridge, microwave
  7. Backyard furniture

Some of these amenities are basic requirements and must be available, and the others are offered at the landlord’s convenience.

Payment information

An itemized list of rent, taxes and fees to be paid by the tenant should then appear after amenities. Tenants will normally appreciate it if they are made aware of what they are paying for.

Some of the common categories of payment include; 

  • Rental rate– Rental rate is the amount the tenant pays for occupying the space for the specified period. The agreement should state how much is being charged for living there per night and the number of days they will occupy the premises. The total is the product of the two and represents money billed for occupation alone.
  • Fees and Taxes– The rental agreement should show any other applicable charges other than rental rates. These charges will vary from one lease to the other. Most common include cleaning and security. In cases where the rental income is taxed, the agreement should state so and declare it as “taxes.” Any other fee that does not have to be specified can be listed as “other.”
  • Initial/security deposit – Typically, tenants will be required to include a security deposit while making reservations. It can be refundable or non-refundable (commonly), depending on the state laws. The agreement should declare how much the landlord is asking as a deposit; how many days before moving is due; and if it is refundable, how many days after checking out can tenants expect their refund (often 30 days under state law). The amount should be specified in monetary units and figures. The security deposit covers the landlord in case of damage to property or personal belongings that end up missing. 
  • Total due – Once all costs in matters of occupation and accommodation within the property have been declared, the vacation rental agreement should state the total expected from the tenant. The total is a summation of all outlined fees. The amount should be stated in figures and monetary units for specificity.
  • Additional paid services – In some instances, it may be necessary to include additional charges for services or provisions that tenants can opt-out of – “non-basic” charges. Such additional services include;
  • Pet fee – Some tenants opt to have their pets with them during vacation. To accommodate them, as a landlord, one can impose a pet fee for pet owners.
  • Hot tub fee – If there is a hot tub available, its use can be permitted at a fee for tenants willing to enjoy its comfort.
  • Catering fee – Catering services can sometimes be offered to improve the tenants’ stay at the premises. Since this is a service, it can be offered at a cost for tenants opting out of preparing their meals.

Payment details

The next step should be for the landlord to declare their preferred method of payment. This is landlord-specific. The methods to choose from are;

  • Credit or debit card
  • Cheque
  • PayPal
  • Other

House rules

Each landlord will most certainly have house rules to keep their property in proper shape. House rules can be customized as much as possible, but one should not be too strict as the main objective is to have the tenants feel comfortable within the premises. House rules will commonly touch on smoking, partying, unregistered guests, etc. The agreement should outline the primary house rules whose violation can be detrimental to the property.

Occupancy limitations

It is customarily up to the landlord to decide how many occupants can be allowed to stay within the property at one time. The agreement should communicate this to assist the tenant in determining if the available space meets their requirements.

Minimum stay requirements

It is important to include the minimum duration the tenant can stay within the premises. Commonly it is one day for short-term leases, but some landlords may opt to increase the days for economic reasons or convenience. Therefore, the minimum duration of stay should appear clearly in the rental agreement.

Parking

For some properties, it might be possible to provide parking space for tenants. If such is the case, it should be stated in the agreement, and the number of parking spaces should be specified. Likewise, if street or non-reserved parking is available, the agreement should declare so.

Garbage

It is expected that trash will be generated during the tenants’ stay at the property, and it would only be right to provide them with somewhere to dispose of it. The agreement should declare where disposal should be done to dispose of any trash other than the allocated area. The landlord is obligated to lodge a complaint or charge the tenant.

Keys

The next step should be to outline where keys should be picked up and dropped off at the beginning and end of tenancy, respectively. This can sometimes be from the property manager’s office.

Permission for pets

A vacation rental agreement should communicate the landlord’s stand when it comes to pets. This should be indicated next. Other than the landlord’s position, it should state how many pets and what type of pets are allowed.  If pets are not permitted at all, the agreement should adamantly state so at this point.

Contact information

Next, contact information that tenants can use for queries or emergencies should be indicated. Again, it will normally be the landlord or his or her agent. Contact information should include the name, address, phone number, and email address. Again, this contact information is meant for tenants during the tenancy. 

Governing law

As earlier stated, vacation rental agreements are subjected to state law. Hence, there is a need to affirm which state jurisdiction the agreement falls under when writing the agreement. This is achieved by simply indicating the name of the state where this property is located.

Lead paint disclosure

Buildings constructed before 1978 are more than likely to have lead-based paint. Lead paint is hazardous, especially if chipped or disturbed hence the need for federal law to declare a lead paint disclosure mandatory in rental agreements; vacation rental agreements included. To help the tenant understand the need for this disclosure, they can be issued with a pamphlet stating the dangers associated with lead-based paint. 

Check-in and check-out terms 

If there are additional check-in and check-out terms not discussed earlier in the agreement, they should be included at this point in the agreement. Such terms can include that a notice must be issued before check-in and tenants should not moving unless notified and that tenants should notify the landlord or manager of their arrival. Sometimes tenants might choose to check out early or late; the agreement should highlight how such instances should be handled, usually through a written notice.

Signatures

A vacation rental agreement must be signed by the parties involved in the agreement for it to be legally binding. Therefore, signatures should be included at this point in the agreement. Vacation rental agreements can be signed manually or electronically, and regardless of the method, their validity is not compromised. Signatures should appear before the signatory’s name, and the date of signing should follow.

Booking confirmation form

To further enhance the quality of a vacation rental agreement, one can opt to include a booking confirmation form. This form is more of an overview of the lease. It contains the names of the tenant (referred to as Guest), name of the landlord (referred to as Owner), deposit paid or to be paid upfront, and any other pertinent information.

Additional provisions

There are other provisions that can be included in a vacation rental agreement. Included, they improve the effectiveness of the agreement.

These are;

  • Cancellation policies– A landlord can outline certain events that can influence them to terminate the lease. This allows the landlord to evict tenants deemed unworthy without facing litigation. Cancellation is usually without refund.
  • Scam Bookings– With the internet being available to anyone and everyone, some people may apply for tenancy under false pretenses or with ill intentions. Including a provision for scam bookings protects the landlord from any lawsuits applicable due to the scam booking.
  • Host’s access to the property– It is common for landlords or managers to require access to the property during the tenants’ stay for maintenance, emergency, or inspection to check compliance with the terms of the agreement. Therefore, a clause should be provided in the agreement stating how much notice is needed (could two hours or twenty-four hours), if at all, before access is granted, and under what circumstances.
  • Rental-specific requirements– As earlier stated, vacation rental agreements can be personalized as best suited for the property. If there are things specific to the property one would like to address in the agreement, they should be included in the agreement. They can range from wheelchair accessibility to the property, declaration of how child-friendly the property is, or extreme climate occurrences within the region.
  • Insurance recommendations– As mentioned earlier, leasing vacation rentals is normally treated as a business; therefore, landlords will often be required to have insurance for damages to property or accidents within the premises. One can outline in the agreement the insurance covers available as tenants and recommend which insurance to get for unprecedented events the landlord is not liable for. 

Free Agreement Templates

Short-Term-Vacation-Lease-Agreement-Sample_

Short-Term-Vacation-Lease-Agreement-Template_

    Frequently Asked Questions (FAQs)

    Why does one need a vacation rental agreement?

    A vacation rental agreement protects one from any disputes during the lease term or during checking-out. In addition, since it is legally binding if signed by both parties, it can be presented in court as written evidence of what was agreed by the property owner and the guest.

    How do I write a vacation rental agreement?

    There are several ways of writing a vacation rental agreement. The first and simplest method is to acquire a template that meets one’s state requirements and filling out the important details. The second being to write one from scratch and ensuring all the relevant components, parties, property description, rental rates, security deposit, lease term, amenities, utilities, etc., are included. Alternatively, one can hire a real estate agent or lawyer to write one.

    What are the two types of vacation rental agreements?

    Vacation rental agreements can either be short-term or periodic. One of the distinguishing factors being, short-term rental agreements have a specified lease term, where else periodic are renewed as agreed on.

    What is the difference between a lease agreement and a rent agreement?

    The fundamental difference between a lease and rental agreement is the length of the agreement. Lease agreements allow tenancy for longer periods of 6-12 months, while rental agreements will often last for not more than 30 days.

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