Vacation Rental Agreement Definition

Vacation rental agreements are legally binding contracts that govern the relationship between a property owner or manager and a tenant or guest seeking to rent their property. These contracts outline the specific terms for occupancy including the rental rate, security deposit, restrictions related to pets, smoking, and guests, as well as fees levied for various amenities such as a pet fee or a charge for using a recreational complex.
In addition, a vacation rental agreement may include relevant ordinances, and enforceable information on garnishment and dispute resolution. Further defined in the agreement may be the period of occupancy , payment arrangements, and other expectations. Oftentimes, a guest will sign an agreement when he or she is making a reservation, which clearly outlines the conditions for staying at the specific rental.
These agreements are essential for both the guests and renters to fully understand their expectations and obligations under the rental. Often these agreements will highlight penalties or costs for violating the agreement, violation of which may cause the guest to forfeit his or her security deposit and possibly even be evicted from the property.

Components of a Vacation Rental Agreement

The key elements that should be clearly included in every vacation rental agreement are as follows:

1. Rental Terms and Conditions

These should include, but not be limited to, the following: (i) rental period including check-in and check-out times, (ii) number of sleeping rooms, bedrooms and bathrooms, (iii) maximum occupancy, (iv) number of allowed pets, (v) areas where pets are allowed, (vi) area of the property that is off limits, (vii) other restrictions including but not limited to where vehicles can be parked if permitted, and (viii) the fees charged for breaking any of these restrictions.

2. Payment Details

This should include the total rental amount including taxes and any other fees. The payment details should also specify how payments will be made and when, what forms of payment will be accepted, if the payments are non-refundable whether the rental amount will be refunded in full or partially in the event of cancellation, when the payments must be made, whether the rental company will bill the guest and if so, on what timetable or if the guest will be required to make the payments without having to be billed. These details should also explain how the total rental fee is broken down (i.e. $500 per room, $25 per person or $100 per dog). The agreement should also specify when security deposits will be required and the manner in which they will be returned once there is a determination that no cleaning bills will be assessed after the guest leaves. It should also explain that charges over and above the base rental amount can be deducted from the deposit.

3. Cancellation Policy

The cancellation policy should be clear and straight forward. It should explain whether deposits will be refunded in full or in part in the event of cancellation and at what point in time the cancellation must be made in order to receive a full or partial refund. If the contract permits a guest to cancel and the rental company is forced to lower its rates to get a rental after a guest has canceled, the cancellation should be explained that the guest is responsible for paying the difference between the original rate and the lowered rate.

Lawful Provisions and Compliance

With the growth of the vacation rental industry, many states have adopted specific legal requirements for vacation homes and short-term rentals. These laws can vary significantly from state to state, but property owners and renters alike should be aware of some of the most common requirements:
Registering with local authorities. Property owners who wish to rent out properties on a short-term basis must often obtain a business license or register the specific property with the tax assessor. Many counties and municipalities also require property owners to maintain separate liability insurance with a certain level of coverage.
Collecting and remitting taxes. Many state and local governments impose taxes on short-term rentals, and property owners are responsible for collecting and remitting those taxes on periodic set intervals. For example, owners of vacation rentals in Hawaii must collect Transient Accommodation Tax and General Excise Tax and remit both taxes to the state Department of Taxation. Depending on the county or city of the vacation rental, additional lodgers’ tax may also be required to be collected and remitted.
The short-term rental agreement itself may be regulated by state law to provide certain protections to renters. For example, California Civil Code Sections 1943-1945 provides for reasonable access to the property by both parties. Other regulations determine a touristic maximum stay within a rental unit (less than 30 days), language warning that the contract is not a lease and is not covered by California tenant protections, and notifying renters that the property is in a geographical area subject to natural hazards such as tsunamis, floods, and earthquakes.
Many vacation rentals and short-term rental agreements are exempt from landlord-tenant laws if the owner rents exclusively for fewer than 90 days per year and receives no payments or other compensation. However, even otherwise exempt rentals should include basic terms governing required notices, security deposits, late rent payments, property damage, eviction and move-out rights and other items.
A written contract protects both parties. Owners should comply with all local licensing and taxing requirements to protect themselves against liability and to ensure smooth operation. Informed renters should recognize what protections they have and how to protect their rights.

Common Provisions in Vacation Rental Agreements

When entering into a vacation rental agreement, renters will commonly come across the following types of clauses:
Pets
Landlords may have specific terms regarding pets. Pet-friendly spaces will require the renter to pay a non-refundable deposit to cover any additional cleaning services that will be needed when they leave. Animals that are permitted may even have size and breed restrictions. If an animal is found on the property that was not pre-authorized by the landlord, you may be asked to vacate the rental property immediately.
Occupancy Limits
Landlords may restrict the number of people who can occupy their property at one time. This is done primarily to prevent damages, but it also protects the comfort of neighbors. Landlords who live on-site may have more discretion in allowing people over for a short period; however, some places such as lakefront cabins will have strict rules as to occupancy.
Maintenance & Repairs
The landlord is responsible for keeping the rental property maintained and replying to emergency repair requests immediately. Renters should take care of minor maintenance issues they can handle on their own. A clause in the contract may state that the renter will be liable for any damages or losses left unaddressed. Renters are responsible for the cost of replacing broken or lost items within the property during their visit.

Resolving Disputes with Vacation Rental Agreements

Dispute Resolution in Vacation Rental Agreements
When entering into a rental agreement, it is important to understand how disputes are addressed and resolved. Some rental agreements include a mediation provision, which typically requires the parties to first attempt to resolve their dispute through mediation. Mediation is often less expensive, better for your reputation, results in less publicity, easier on your staff/employee, and less time consuming than proceeding directly to litigation. However, even if a rental agreement requires mediation before resorting to litigation, it typically provides that if the attempted mediation is unsuccessful, any party may initiate an action seeking any available judicial remedy.
If mediation is attempted and proves unsuccessful, the parties should consider whether an arbitration provision is appropriate. Arbitration is a process where two or more parties agree to appoint one or more qualified individuals as arbitrators to act as private judges to settle their dispute. The arbitration agreement should provide for whether a party is entitled to request a jury trial. If the sum of money in question is high, the parties may wish to consider waiving their constitutional right to a jury and agreeing to submit the matter to a panel of arbitrators with knowledge of the issues involved in the case.
While arbitration can be less costly than litigation, the parties should consider that arbitration is rarely administratively "free . " The appointment of an arbitrator or arbitrators (whether a single arbitrator or a three person panel) is commonly paid for by the parties. The parties can also expect to pay the arbitrator for his or her time spent conducting hearings. While the specific amount charged by the arbitrator will depend on the arbitrator’s practice, similar to lawyers, arbitrators commonly charge by the hour. Thus, the party requesting a jury can expect to pay fees for the time associated for the panel to review the matter, on a pro-rata basis, if each side is only allowed a certain number of hours to present its side of the case.
The parties should also check to see if the individual arbitrator(s) have been approved by the American Arbitration Association ("AAA") to conduct AAA cases. If AAA arbitrators are used, the parties can expect something like a one (1) hour administrative fee for the AAA’s assistance in administering the case, plus certain per diem and other administrative fees to be deducted from the awarded damages.
In most cases, either party can initiate litigation immediately following a failed mediation, or a failed arbitration. However, Florida law will only permit a party to recover attorney’s fees incurred during the arbitration process in specific circumstances. Please refer to Section 768.79, Florida Statutes, and the Florida Medical Malpractice Act for further guidance on when and how to recover attorneys’ fees.

What Renters Should Know About Vacation Rental Agreements

"In general, renters should look for the following items in an agreement so that they can fully understand and avoid any pitfalls:"
Cancellation and Refund Policy:
What is the policy if Renter cancels or the property has to be canceled? Are you guaranteed your payment back at least partially? These are important questions to ask especially in this time of COVID which has been troublesome for some vacationers.
Rental Period:
How long is the rental period? Is it Friday 3 pm to Sunday 10 am or Saturday to Saturday? Be sure that if you are flying into town for your vacation, that the dates make sense for various travel logistics.
Clean up:
Who is responsible for cleanup? Are you responsible to wash linens and towels and return them to their place? Make sure you understand what is expected of you so that you are not blamed after you feel that you returned the property as you found it.
Deposit/Fees:
While most properties require a security deposit that is 100% refundable after your stay if there are no damages to the property, it is important to note what is not refundable and whether any extra fees are charged that renters should be aware of.
Early Arrival or Late Departure Fees:
Many properties charge additional fees if you arrive earlier than the designated time (and likewise, check to see if you are permitted to drop off your bags.) Also check to make sure the late departure fee is reasonable if you desire the opportunity to stay on and take a longer flight home.
House Rules:
The best-run vacation rentals make a point to post house rules clearly and concisely.

Write a Vacation Rental Agreement: Samples and Suggestions

Own a property meant for vacation or seasonal rentals? What’s your worst nightmare? While most of us could probably name five things that might go wrong with a group of tenants, we may be unwilling to spend the time (and effort) to prepare for these problems. Yet one of the best ways to avoid potential legal issues while still operating a rental property is to enter into a thorough, well-drafted vacation rental agreement with your tenants.
The vacation rental agreement is intended to help you as the property owner to protect your property from unreasonable damage and to make the tenant aware of any rules you have put in place to keep on eye on the premises or to limit how many guests may be visiting at one time.
Best Practices for Drafting Successful vacation rental agreements should use clear language and anticipate problems. It should not be written in "legalese" and should avoid using complex terms or jargon that could confuse tenants . Use drop down box options for things like: Payment Options – What days are the rent due? How much is dry cleaning for linens? Is there a daily rate for extra guests? Fees and Rules – Are pets allowed? Visitors? Is swimming allowed? Is smoking allowed? Is there a cleaning fee? What time do visitors have to leave? Security Deposit – When do you return the deposit, and under what circumstances could it be kept? Consider whether your agreement intends to abide by any additional local laws, such as zoning regulations, health codes, insurance requirements or registration. On an individual basis, some lease agreements may opt to include options for early termination and/or cancellation clauses, but keep in mind that a cancellation clause may not be so friendly to your checking account if you own the property to supplement your retirement income. The nature of a vacation rental property makes it more likely that the tenant will run into problems with billing, local laws or service providers, so you want to be mindful to include coverage for these issues in the agreement and to plan to have extra time set aside for potential concerns with the property. Drafting the agreement with clear and concise language can save you both headaches in the future and help you avoid potential liability for damages.