A short-term rental agreement, or vacation rental agreement, is a contract between a landlord and a tenant that outlines the terms of a short stay at a rental property.
Completing a rental agreement is essential, even if guests only stay for a short time, because it clearly defines the expectations of the owner and guest(s), and protects both parties in case of damages or cancellation.
When to Use a Short-Term Rental Agreement
You should use a short-term rental agreement when you’re renting a furnished property for less than six months. However, most people use this type of lease to rent out their home for vacations or short visits of a few days or weeks.
If you’re using an online rental platform like Airbnb or VRBO, you may be required to create a rental agreement. Even if it’s not required, it’s always a good idea to provide additional legal protection in case of a dispute.
If you rent your property out for more than 14 consecutive days, you will need to pay taxes on rental income, so it’s essential to have detailed short-term rental contracts, especially if you need to prove exemption from taxes on some of your rental income or claim a deduction on business expenses.
What to Include in a Short-Term Rental Agreement
A basic short-term rental agreement should include the following:
- Property details (description and amenities)
- Guests (rental party)
- Rental period
- Rules and regulations
- Check-in & check-out procedures
- Rent, deposit, and payment details
- Cancellation policy
- Owner and guest signatures
How to Write a Rental Agreement for Vacation or Short-Term Stays
Follow these steps to create a short-term rental agreement for your property.
Step 1: Check local requirements
Make sure to check state and local laws regarding vacation rentals before you begin.
In some locations, short-term vacation rentals are restricted, taxed, or have specific requirements. Some cities, like Austin, TX, require a short-term rental license to rent out your property for less than 30 days at a time.
Step 2: Assess your liability
With guests coming in and out of your property more frequently, you’ll want to factor in an increased risk of damage or degradation of your property.
Consider updating your insurance policy, or create an LLC for your rental property to limit your personal liability and protect your assets.
Step 3: Describe the property and amenities
In your rental agreement, include the property address, the property type (house, apartment, etc.), and the private and public facilities the guests will have access to during their stay.
Also, list the amenities included with the property, such as:
- Washer and dryer
- Swimming pool or hot tub
- Linens and towels
- Basic cooking supplies
Step 4: Write owner and guest information
In addition to the property owner’s full name and contact information, write the names of the “guest” (the person signing the rental agreement with you) and all members of the rental party.
This helps you ensure the property doesn’t exceed the maximum occupancy and allows you to charge a fee or respond accordingly if there are any additional guests not included in the agreement.
Step 5: Outline rules and policies
Clearly state your policies regarding the following:
- Visitors (not members of the rental party)
- Maximum occupancy
- Damage to property and belongings
Include specific penalties (like fees or termination of the rental agreement) if the tenant doesn’t comply with a given policy.
Step 6: Explain check-in and check-out procedures
In the rental agreement, write the arrival date and check-in time, and explain how guests can gain access to the property.
Also describe the check-out process, including check-out time, key drop off, and any cleaning that guests are expected to do before they leave. If your guests require a physical key to enter the rental property, note any fees associated with lost keys in the contract.
Step 7: Include payment details
Your short-term rental agreement should clearly state the rental cost (rate and total amount due), with a breakdown of any local taxes, cleaning fees, and other applicable charges. Include acceptable payment methods (cash, check transfer, etc.), and the date payment is due.
It’s also a good idea to require a security deposit to protect you in the event of a last-minute cancellation. Typically, the guest pays the security deposit when making the reservation, and the owner refunds the deposit at check-out or deducts it from the total balance.
Depending on your cancellation policy, you may offer guests a partial or full refund of their deposit if they cancel with enough notice or unforeseen circumstances occur (like severe weather).
Step 8: Sign the agreement
After the guest has read and agreed to the terms of the rental agreement, both parties should sign and date the agreement. Give the guest a copy of the signed rental agreement and proof of payment for their security deposit.