Short-Term Rental Agreement: Should You Have It for Your Business?

short term rental agreement

By the Hospitable Team

Renting out your home or apartment short-term on Vrbo, Booking.com or Airbnb is a great way to earn some passive income or build a successful vacation rental business. But you should also protect your property and ensure that everything runs smoothly. There are many ways to do it, for example, screening guests, installing security devices, getting additional vacation rental insurance, to name a few.

Another smart move to minimize your risks of dealing with guests who may not respect your house rules for Airbnb and Vrbo is having a short-term rental agreement in place. Read on to find out why such an agreement is essential and what key points you should include in it.

What Is a Short-Term Rental Agreement?

A short-term rental agreement is a legal contract between a property owner (host) and a renter (guest) that outlines the terms and conditions of a stay at a rental property. This document is also known as a vacation rental agreement and is usually meant for a short rental period (between 1 and 30 days).

A rental agreement clearly defines the property owner’s and guests’ expectations and protects both parties in case of damages or cancellations. Simply put, this document spells out the house rules for guests and explains the penalties for breaking them.

Airbnb hosts are covered for most scenarios with Airbnb Standard Agreement that every guest must adhere to. But the platform also allows hosts to ask their guests to sign a contract before staying in their place.

Keep in mind that you must disclose the actual contract terms prior to booking. If you ask your Airbnb guest to sign a rental agreement without notifying them before booking, they can decline and ask you to cancel the reservation.

Airbnb recommends mentioning the short-term rental agreement in your Airbnb listing’s description. You should also include the full terms in your message flow with the guest after they make a reservation.

You’ll never forget to share your rental contract details with your guests if you use vacation rental software like Hospitable that can help you automate communication with your guests. Hospitable allows you to schedule a message after each reservation, and you can include a digital copy of your rental agreement.

Plenty of messages to send to your guests.

Most of them are routine, and our AI will take care of them in no time.

Vrbo doesn’t require hosts to have a vacation rental agreement, but they consider it can be helpful in some cases. So the platform makes it easy for hosts to upload their short-term rental agreements as part of their profiles and save them as PDF files. This way, Vrbo guests can review rental agreements before they make a reservation. Vrbo also encourages hosts to provide their Vrbo house rules directly on their website.

Vacation Rental Agreement: Key Things to Include

Every vacation rental property is different, so the terms you should cover in your short-term rental agreement will depend on your specific situation. Still, essential things should be present in each vacation rental agreement. Here are some basic points you will want to include in your contract:

  • Rental property details—provide the rental’s house number, street address, city or town, and area code, give a detailed description of your rental space, and include a list of amenities you offer.
  • Information about both parties—state your full legal name, as well as the full names of all guests who will stay at your property during the rental period.
  • Rental period—include the arrival and departure dates.
  • Maximum occupancy—specify the number of guests that are allowed to stay at your rental.
  • Check-in and check-out procedures—explain how guests can access your property and specify check-in and check-out times.
  • Rate, additional fees, and payment terms—outline everything related to payment, including the rental rate and additional charges, such as cleaning fees, pet fees, payment due dates, and a security deposit.
  • House rules—explain your pet, noise, and smoking policies, as well as age requirements, and underline the penalties you charge for breaking the rules.
  • Cancellation policies—explain how a guest can cancel the agreement.
  • Signatures of both parties—make sure your guests sign the agreement in the correct place because the document is completely null without a valid signature

This list of common elements included in a typical short-term rental agreement is a good place to start when creating your own. But make sure you include terms and conditions specific to your rental property because what works at a mountain cabin won’t protect the owner of a beach house. And, of course, you should consult a real estate attorney for guidance.

To help you get a better idea of what this important document should look like, here is a free sample vacation rental agreement that you can download right now.

Rental Agreement

DISCLAIMER: This is a sample vacation rental agreement only.

Please ensure you seek the advice of an attorney before finalizing any legally binding document. Your agreement should be revised and updated habitually to adhere to any changing local or state laws.

Why Use a Vacation Rental Agreement?

Not all hosts and property managers choose to use a short-term rental agreement when dealing with guests. Some may worry that asking travelers to sign a legally-binding document before booking their property may put them off. And if you’re a busy host, you may not like the idea of doing more administrative work when creating a new contract for each new reservation.

But a vacation rental agreement can bring many benefits to both hosts and guests—it protects you, your guests, and your property.

  • It adds transparency. You and your guests can discuss any points before putting them into writing, which minimizes the risk of potential disputes and problems happening later.
  • A rental agreement written in simple language leaves less room for misunderstanding. Your guests can ask additional questions if they’re unsure of anything and sign the document with a full understanding of what is required of them.
  • Both parties are legally protected. After you and your guests review and sign the contract, you are legally bound to it. If one party ignores the agreement, the other party can pursue legal action.

So, although writing this legally-binding document involves time-consuming and tedious paperwork, it’s worth your time and effort. A rental agreement helps protect your property and business in emergencies or unexpected situations.

Of course, as a host, you have a lot on your plate when managing your listings, communicating with guests, and assigning tasks to your team. But you can use your time more efficiently by automating routine operations with tools like Hospitable instead of handling your daily tasks manually.

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Not using a rental agreement could negatively affect your vacation rental business. For example, you may risk dealing with illegal squatters who refuse to leave your property or with unpleasant complaints from guests because of a lack of clear communication. 

Final Thought

A short-term rental agreement can help ensure that guests respect your vacation rental property as much as you do. This document defines the rights and responsibilities of both parties so it can protect you and your guests in disputes or discrepancies. As a result, a rental agreement can help you avoid conflicts with guests during and after their stay.

Still, it’s up to you to decide whether you should add a vacation rental agreement to your Vrbo or Airbnb. If you choose to use a contract, feel free to download our sample in PDF format to get a better idea of what key points you include in it. And, of course, you should seek the advice of an attorney before finalizing this document. 

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