A short-term rental agreement is a contract, signed by both host and guests, that lays out the terms of the rental so there are no misunderstandings. Your guests agree to pay a certain amount of money for the use of your home for a certain period of time, abide by certain rules, and return the property to you in good condition. You agree to hand over the property for the specified dates, leave it clean and in good condition, and provide certain things during the guests’ stay.
Before discussing rental terms and drawing up the agreement, decide what is non-negotiable for you – maximum number of people, rent amount, deposit amount, when the rent will be paid, arrival and departure dates, no smoking in the home. If you lose guests because they balk at a non-negotiable term, you’re probably better off.
Once you and the guests have agreed on the exact terms, draw up an agreement. If you use one of the boilerplate forms available on the Web or a form from your listing site, make sure it’s easy to read and applies to the specific situation. If there’s too much “legalese” or it includes too many items that aren’t relevant, use it as a guide for writing your own agreement.
When the agreement is ready, send it to your guests and give them a chance to ask questions about any of the terms. When everyone is satisfied with the terms, ask the guests to sign two copies and return them to you with their deposit. Once their deposit has cleared, send them a copy with your signature.
Disclaimer: This is Not Legal Advice!
I’m not a lawyer, and the information on this site is not meant as legal advice. If you want to be sure your agreement will stand up in court, consult an attorney.
Items to Include in a Short-Term Rental Agreement
Rental agreements typically cover the following:
- Dates of the rental period
- Street address of your home and your mailing address if different
- Names and addresses of each adult and ages of children staying in the home
- Amount of and terms for security deposit
- Amount of rent and payment schedule
- Change/cancellation terms
- Guests’ duties and responsibilities
- What the rent does and does not cover
- Prohibitions, if any
Tips for Drawing Up Your Short-Term Rental Agreement
Be specific about the dates. Avoid misunderstandings by stating the dates so they can be understood only one way: “March 1 – March 15, 2014,” not “The first two weeks of March”; December 23 – January 2,” not “For the holidays.” Include a statement that this is your primary residence (if it is), available only as a temporary, short-term rental (which it will be), and the guests agree to move out at the end of the rental period.
Include the complete physical address. It’s not unknown for people to have trouble finding a rental home, which can be a major problem if you have already left on your trip. Include the complete, correct street address of the home, including zip code, so it can be easily found on a Google map. Add your mailing address, if it’s different.
Describe who will occupy the home. Guests sometimes assume that because they are paying for use of your home, they can invite anyone they want to stay with them. But even a single additional person creates additional wear and tear and increases the possibility of damage. Include the names and current addresses of all adults and the ages of any children who are allowed to stay there while you are away. If relevant, include wording to cover occasional overnight guests.
Specify the amount and terms of the security/damage deposit. The deposit “secures” the rental and provides at least partial reimbursement if guests cancel at the last minute. It also helps pay the costs of any guest-caused damage or unreasonably high use of electricity, international phone calls, or pay-per-view TV.
Clearly state the total amount of the deposit and describe the terms: when it must be paid, when it will be refunded, and the terms under which some or all of it may be withheld. Be sure to comply with any state or local laws that regulate the collection and holding of security deposits and include the appropriate wording in the agreement.
Include a rent payment schedule. State the amount of the rent per night, per week, or per month and include the total. Specify when the rent payments are due. People who rent out their homes on a short-term basis typically collect the full amount of the rent in advance – often at the time of booking, even if that is several months ahead of guests’ arrival. If the guests back out, the owners may be able to keep all or some of the rent unless they find a replacement.
Agree with guests on how they will pay the rent: personal check, wire transfer, PayPal, credit card, or (rarely) cash (not advised). Some short-term rental sites will handle eCheck and credit card payments for you; commission-based sites such as Airbnb collect the rent, then take their cut before turning the balance over to you.
Here’s what we do: For a rental of two months or less, we collect the entire amount at least 14 – 30 days before the arrival date, so we can be sure that payment is in our account before handing over the keys. For a stay of three months or longer, we normally ask for the first and last months’ rent in advance and ask guests to make the remaining payments at least 14 days before the beginning of each month.
Specify what the rent covers and what is not included. Describe what the rent covers, such as the furnishings needed for everyday living, utilities, internet service, gardening, a space in the building garage, pool service, and/or weekly housecleaning. Also describe what the rent does not cover, such as pay-per-view TV or access to the building gym.
Most people who rent out their home short-term continue to pay all or most of their regular household expenses. We ask guests to pay for gas and electric, so they can feel free to use the heat or air conditioning to their heart’s content; we pay for standard cable TV, Internet, and gardening.
State the terms under which the agreement can be changed or cancelled. For example, “The dates of the rental period are subject to change up to March 15” or “either party can cancel up to 45 days before the start of the rental period.” You might also specify that no rent will be refunded if the guest leaves before the end of the rental period.
Describe the guests’ duties and responsibilities. Most guests don’t mind taking on a few household duties such as picking up the mail and watering the plants. Sometimes, a condition of the rental is that guests care for your pets while you’re away (perhaps receiving a lower-than-usual rent in return). It’s also a good idea to include a statement to the effect that “owners will leave the home clean and in good condition and guests agree to return it in the same condition as it was in when they arrived.”
If you belong to an HOA or Coop association, include a statement that the guests agree to abide by its rules and regulations. Attach a copy of the relevant parts of the association document or leave it in the home for the guests to read.
Describe any prohibitions. Specify anything that is not allowed, such as additional guests, pets, smoking, the use of certain parts of the home, or having late-night parties.
What’s Next: Prepare for your Guests
