Top 20 Things to Include in Your Short Term Rental Agreement

When you’re managing a vacation rental property, whether you list it on Airbnb, Vrbo or solely through direct bookings, having a solid short-term rental agreement in place is absolutely essential. 

Not only does it safeguard your property and rights, but it also establishes clear expectations with your guests, preventing future misunderstandings and conflicts. Think of it as not just paperwork but your first step in stress-free hosting. It's about ensuring everyone is on the same page—literally and figuratively—before the stay begins.

Top 20 things to include in a short-term rental agreement: 

1. Detailed property description

2. Identification of parties

3. Exact rental period

4. Specific occupancy limits

5. Comprehensive fee structure

6. Security deposit details

7. Clear cancellation policy

8. Structured check-in and check-out

9. Explicit house rules

10. Maintenance responsibilities

11. Conditions for the right of entry

12. Amenities usage guidelines

13. Technology use

14. Compliance with local laws

15. Emergency contact information

16. Liability and insurance

17. Prohibition on subletting

18. Enforcement of agreement breaches

19. Dispute resolution mechanism

20. Signature and agreement confirmation

What is a Short-Term Rental Agreement?

A short-term rental agreement, also known as a short-term lease, is a crucial document that spells out the roles and responsibilities of both the vacation rental manager (the "Lessor") and the guest (the "Guest"). This agreement packs all the essential rules and details needed for a guest to rent your property for a brief period—typically no more than 30 days. Keep in mind, the specifics of your agreement might vary based on local laws that apply to your property's location.

Why is it Important to Have a Short-Term Rental Agreement?

When you list your property on an Online travel agency (OTA) and secure a booking, both you and your guest are bound by that OTA’s rules regarding host and guest behavior. While platforms like Airbnb and Vrbo offer insurance programs covering certain damages and liabilities, a short-term rental agreement adds an extra layer of protection for you and your property.

Advantages of a short-term rental agreement:

1. Deter unruly guests

A legally binding agreement tends to discourage guests who might otherwise engage in poor behavior, as it holds them accountable.

2. Clarify rules and penalties

Guests will be fully informed about the rules, conditions and potential penalties for non-compliance, reducing misunderstandings.

3. Prevent negative reviews

Clear expectations can decrease the likelihood of negative reviews stemming from guests' misplaced expectations.

4. Legal protection

A detailed agreement allows you to pursue legal remedies for damages more effectively, independent of OTA policies.

5. Guard against liability

It helps ensure you are not held responsible for any illegal actions taken by guests during their stay.

6. Tax benefits

The agreement serves as documentation that may qualify you for tax deductions or exemptions.

7. Ease evictions

If a guest overstays their welcome, a signed agreement simplifies the eviction process.

8. Support insurance claims

Many insurers require a rental agreement before processing insurance claims related to guest-incurred property damage.

What Should You Include in Your Short-Term Rental Agreement?

The specifics of your short-term rental agreement will vary based on the type of property you're offering, be it a condo, a castle or even a tent cabin. Additionally, the platform through which the guest books—different OTAs have unique rules—can influence the terms of your agreement. If a guest books directly with you, you'll generally have more flexibility in shaping the agreement.

Your agreement must also adhere to all relevant legal requirements in the city, county and state where your property is located. Here are some key pieces of information and clauses that should be included in your short-term rental agreement to ensure comprehensiveness and compliance.

1. Detailed property description

Provide a thorough description of your property, including the layout, number of bedrooms and bathrooms, amenities available and any unique features. This should also cover the condition of appliances and furniture, which helps manage expectations and avoids disputes over damages that were pre-existing.

2. Identification of parties

List the full names, addresses and contact details of all adult guests staying at the property. This ensures that each guest is legally responsible for adhering to the terms of the agreement. Also, include your contact information as the host or property manager, enhancing transparency and trust.

3. Exact rental period

Clearly state the check-in and check-out dates and exact times to prevent any confusion. This section should also outline the procedure for requesting changes to the rental period and the consequences of unauthorized early check-ins or late check-outs, such as additional fees.

4. Specific occupancy limits

Define the maximum number of guests allowed based on both safety regulations and comfort. Explain the reasoning behind these limits, such as local zoning laws or insurance requirements and the penalties for exceeding them.

5. Comprehensive fee structure

Detail all fees involved in the rental, including security deposits, cleaning fees and any additional service charges. Clearly state the payment schedule, acceptable payment methods and any penalties for late payments to avoid financial misunderstandings.

6. Security deposit details

Clarify what conditions lead to withholding the security deposit, such as damage to the property or missing items. Provide a checklist of expectations for the property's condition upon departure to help guests comply with these terms.

7. Clear cancellation policy

Articulate the cancellation policy, including timelines for a full or partial refund and the procedure for initiating a cancellation. This ensures both parties understand the financial implications of canceling a booking.

8. Structured check-in and check-out

Describe the check-in process, whether it’s key pickup, a lockbox or a digital entry system. Specify the responsibilities of the guests upon departure, such as property cleanup and key return, to ensure a smooth transition.

9. Explicit house rules

List all house rules regarding noise levels, smoking, pet policies and parking arrangements. Clearly state the consequences of violating these rules, including potential fees or eviction, to enforce compliance.

10. Maintenance responsibilities

Define the guest's responsibilities in maintaining the property, including handling minor repairs or reporting significant issues. Specify how they should report problems and how quickly they can expect these issues to be addressed.

11. Conditions for right of entry

Detail the circumstances under which you may enter the property, such as scheduled maintenance or emergency situations and how much notice will be provided. This respects the guest’s privacy while ensuring you can maintain the property.

12. Amenities usage guidelines

Provide guidelines on using special amenities like pools, saunas or fitness equipment, including any safety precautions or restricted usage times to prevent misuse and ensure safety.

13. Technology use

Explain the usage policies for Wi-Fi, streaming services and any smart home devices. Include troubleshooting tips and whom to contact for technical support, which can enhance guest satisfaction and reduce misunderstandings.

14. Compliance with local laws

Emphasize the importance of adhering to local laws regarding noise, parking and trash disposal. This can include community-specific rules that might affect the guest’s stay.

15. Emergency contact information

List emergency contact numbers, including local emergency services, the nearest hospital and a contact person for urgent property-related issues. Also, describe the location of safety equipment like fire extinguishers and first aid kits.

16. Liability and insurance

Include a liability waiver to protect against claims for accidents not due to property negligence. Encourage guests to obtain travel or renters insurance for personal belongings and injury liabilities.

17. Prohibition on subletting

Make it clear that subletting the property is strictly prohibited, detailing the legal and financial consequences of violating this clause. This prevents unauthorized occupancy and ensures only approved guests use the property.

18. Enforcement of agreement breaches

Detail the actions you will take if you breach the agreement, such as financial penalties or termination of the rental term. This sets clear expectations and provides a legal basis for enforcing the rules.

19. Dispute resolution mechanism

Outline the preferred method for resolving disputes through mediation, arbitration or legal action. This can help manage conflicts effectively if they arise.

20. Signature and agreement confirmation

Electronic or physical signatures are required from all parties to confirm understanding and agreement to the terms.

Ensuring Success with a Strong Short-Term Rental Agreement

A well-crafted short-term rental agreement is essential for managing your vacation rental effectively. Platforms like Airbnb and Vrbo allow hosts to require guests to sign these agreements, which are crucial not just as paperwork but as tools for setting clear expectations and responsibilities. 

While OTAs don't enforce these agreements, having one helps protect your property and enhance guest experiences. Using tools like Hostaway can streamline the process, ensuring your agreements are comprehensive, legal and well-communicated, which is key to a profitable and smooth-running rental business.