For both business and leisure travelers, a holiday home rental is often preferred over a hotel stay. From the privacy and comfort of a holiday home to its competitive pricing, a holiday rental home is packed with advantages for the guest…
For both business and leisure travelers, a holiday home rental is often preferred over a hotel stay. From the privacy and comfort of a holiday home to its competitive pricing, a holiday rental home is packed with advantages for the guest. As the property owner, you can generate an additional stream of income by opening your home up as a holiday rental property. However, there are numerous laws that you must abide by and liability risks that you must mitigate when you rent out your home to someone else regardless of how brief the stay is. Because of the critical importance of your short term rental property management agreement, you need to ensure that it is as comprehensive as possible. What should your rental agreement contain?
The rental agreement should clearly state the address of the property as well as a brief, accurate description of the property. For example, it might state that the guest is renting a three-bedroom house at a specific address. If any additional structures or amenities outside of the home are included, these should be detailed as well. This may include a side structure, a swimming pool, a boat dock and other features. If these and other amenities are on the property and are not going to be available to the guest, these exclusions should be outlined.
The rental agreement is a legal document between the property owner and the guest. At the top of the agreement and near to the property description, inclusions and exclusions, the rental agreement should identify you as the property owner. If you own the house under a business entity, the name of the entity needs to be identified. The renter’s full legal name also needs to be listed on the agreement. In many cases, there will be one responsible individual named as a guest, but other people may be staying on the property as well. The number and ages of the guests should be listed, and the agreement should state that no other people are permitted to stay at the property.
The renter will have the legal right to occupy your holiday rental home for the entire term of the rental period, and he or she will not legally be permitted on the property outside of those dates. In most cases, a short-term rental agreement will clearly state the check-in date and time as well as the check-out date and time. Specific details about how the renter should pick up the key or may otherwise access the property need to be included.
The daily, weekly or monthly rate for the property should be listed. In addition, the total amount for the rental period should be defined clearly as a rental fee. If you are collecting a security deposit, both the refundable and non-refundable portions of this deposit need to be listed. Other fees that you may collect include a daily pet fee, a pet security deposit, a cleaning fee and others. The details about the expenses that may be deducted from the refundable portions of the deposit need to be itemized. For example, the cleaning fee for a pet stain on the carpet may come out of the refundable portion of the pet security deposit. This important section should outline the forms of payment that you will accept and how the guest should make the payments. The due dates for the security deposit and the rent also need to be stated.
As a holiday rental home host, property rules and restrictions are essential for ensuring that the home and all of your personal property in the home are used as intended and not abused or misused. Common rules relate to the number of occupants permitted, the number of pets permitted, pet restrictions related to age and size, parties, on-site parking, the proper and intended uses of amenities that the guest will have access to and more. Property rules should also outline any cleaning steps that you expect the guest to before vacating. Common steps may be to wash the dishes, take out the trash and put the towels in the washing machine.
Cancellations can lead to lost income for property owners. It can be much more difficult to rent out your holiday rental home at the last minute, so your cancellation policy should be designed to protect you against financial loss. The cancellation policy needs to indicate the last date that the guest can cancel the contract for a full refund and for a partial refund. You do not want to be in a position where you are trying to collect money from a renter after he or she has cancelled the contract. With this in mind, it makes sense to align your cancellation details with the due dates for the security deposit and rent.
These are the essential details that your short term rental property management agreement must have, but you may also need or want other clauses in the contract. For example, if the guest will have access to an on-site spa pool, a clause may be included about its use and care. When your rental agreement is not as comprehensive as it needs to be, your risk for financial loss and your exposure to liability issues may increase. At Bachcare, we handle all aspects of the rental process for our clients. This includes setting out terms and conditions for guests, collecting fees, ensuring that the guest has access to the property for the stay period, enforcing property rules and more. To learn more about our extensive holiday home management services, contact Bachcare today.