15 Short-Term Rental Agreement Tips [+Free Template]

As a short-term rental host, you can ensure that your property rental business runs smoothly by composing a short-term rental agreement that minimizes your risks. The agreement should cover the rights and responsibilities of the host and guests.

In addition, it should contain the terms and conditions of the lease.

In this article, we will go over the 15 most important things that you should include in a short-term rental agreement but first, let’s clearly outline why you should use one.

What Is a Short-Term Rental Agreement?

A short-term rental agreement, also known as a vacation rental agreement, is a legal document between a property owner or property manager and the renter. It is usually meant for a short rental period (between 1 and 30 days).

This agreement outlines the terms and conditions of the rental, detailing the rights and responsibilities of both parties.

The document ensures clarity and protection for both hosts and guests, and it goes by various names depending on platform like Airbnb and VRBO or specific use, such as holiday let agreement, temporary rental agreement, short-term lease agreement, Airbnb agreement, and others.

This type of agreement is essential for defining rental terms and mitigating potential disputes during the rental period.

While Airbnb and VRBO provide insurance programs to protect hosts against damages and liabilities, Booking.com does not offer dedicated insurance coverage, leaving it up to the hosts to ensure they have appropriate protection.

It is vital for hosts on all platforms to review and understand the specifics of the provided coverage and to supplement it with additional insurance and a short-term rental agreement to further minimize risks and ensure comprehensive protection.

As a host or property owner, an additional rental agreement gives you the right to require the guest to pay for damages resulting from violations of the short-term rental agreement during the stay.

Short term leases become a legally binding agreement once a tenant agrees and you collect payment. You will gain the right to cancel a booking instantly if the property policies and rules are broken.

The agreement must meet all state laws and be consistent with various listing platform’s standard policies. In addition to a short-term rental agreement, you must provide a copy of the Lead-Based Paint Disclosure Form for structures built before 1978.

When Should You Use a Short-Term Rental Agreement vs a Vacation Rental Agreement?

A short-term rental agreement and a vacation rental agreement are the same thing. Given that a short-term vacation rental agreement helps define hosts’ and guests’ rights and responsibilities for a particular lease term, it is a good idea to use it every time you rent your property to new guests.

The length of the stay should not determine when you use your short-term lease agreement. Use it even if the guests are only staying one night, and even when renting to friends.

The only time that you shouldn’t use a short-term lease agreement is when renting with the intention of having a guest stay longer than 30 days. In this case, you should draw up a formal month-to-month agreement or a fixed-term, long-term lease agreement.

You can ask a guest to sign a short-term rental agreement before they gain access, as long as you disclose the terms prior to booking. Airbnb recommends that you do this by mentioning the agreement in your listing description.

In this way, both parties can discuss specific terms that both agree upon, including things like the length of stay, rules, and regulations, payment terms, etc.

You should also list the terms of the vacation rental contract again in a message thread with your guest.

15 Key Things to Include in a Short-term Rental Agreement for Vacation Rentals

As every property is different, the terms you should cover in an agreement will depend on the specificity of the situation. However, there are certain key things that should be present in each short-term rental agreement.

Here are 15 common elements you will want to include in your vacation rental agreement:

1. Rental Property Details

Write a clear description of your vacation rental property. This section should include your property address, explain all of your property information and the amenities that are included in your vacation property, from it being a furbished property and including a swimming pool for example. Make sure that the language is clear and unambiguous.

2. Rental Period

This is one of the most important sections. The agreement should include the date of arrival and check-in, any specific check-out procedures and the date of departure. If you adjust these dates before guests arrive, they should sign an updated short-term or vacation rental agreement.

3. Information About the Rental Parties

List all of the guests who will stay at your property during the dates of the rental. Be sure to include each guest’s full name, current home address, and phone number. You may also want to specify the effective date, i.e., the date that your short-term lease agreement becomes valid.

4. Maximum Occupancy of Vacation Rental Property

The maximum occupancy is the limit on the number of guests who are permitted to stay at your property. Make sure that you define the sleeping arrangements for each guest. Include the fire code regulations that justify your maximum occupancy number.

This section of the agreement protects you in the event that your guests bring other people to your property unannounced. It also places liability on the guests if those unauthorized visitors suffer injuries or cause damage.

5. Keys and Access

This section should define how guests will gain entry to your property. If you have a lockbox or other key policy that guests should follow, be sure to explain that in your agreement.

6. Rental/House Rules and Restrictions

This clause is essential for every vacation rental agreement as it helps to clearly outline your house rules. Some examples of house rules and restrictions that you might consider to include are no-smoking or no-pet policies. If you charge any penalties for breaking the rules, be sure to highlight them in this section as well.

7. Property Owner Payment Details

In this section, cover everything related to payment. Include the agreed-upon rental rate and the payment due dates. Also, explain the details about other services that you provide. For example, if you offer guided tours, transportation, or breakfast, describe the details here.

8. Security Deposit

A security deposit protects you in the event that a guest causes damage to your property. The host will return the deposit back to the guest upon his/her departure, providing that no incidents occurred. Before selecting an amount to charge for a security deposit, make sure that it is on par with what other hosts in your area charge.

9. Vacation Rental Contract Fees

Many hosts charge extra fees. Make sure that you define the cost, purpose, and required payment dates for any additional fees that you charge outside of the rent and security deposit.

10. Cancellation Policy

This section should explain how a guest can cancel the agreement. Usually, hosts require guests to submit a cancellation request in writing.

11. Cleaning

This is where you should outline exactly what is covered by the cleaning fee. You should also give instructions so that your guests know exactly how to leave your property upon departure.

12. Amenities and Furnishings

In this section of your rental agreement, you should make a list of all the amenities that are available in your house. Go into detail about everything from the furniture to linens, TV, and air conditioner. Be sure to mention any outdoor areas that your guests will have access to as well.

13. Limitation of Liability

Accidents and injuries can happen regardless of how well you maintain your property. The limitation of liability clause helps limit your responsibility if such cases occur. The clause limits the amount that the host has to pay if the guest suffers a loss while a short-term or vacation rental agreement is in place.

This section should include the following:
• It should state the statutory limits for the guest to bring a claim against you, the host.
• It should define the losses each party accepts to compensate with and without limit.
• It should state the losses that each party will completely exclude (specific losses that each party will not be liable for).

14. Violation of Agreement

This section should explain what will happen if either party violates the agreement. You can support your right to cancel their stay if guests break the terms and conditions.

15. Extra Clauses

You may include extra clauses in your short-term vacation rental agreement template. These will further limit what guests may and may not do while staying at your property.

If you don’t want your guests to access certain parts of the property, define this in an extra clause. For example, you can deny them access to the pool area or a particular room in the house.

What are the Consequences of Not Using a Short-term Rental Agreement?

Short-term rental agreements define the rights and responsibilities of both hosts and guests. It is designed to help the host avoid conflicts that may arise during and after a guest’s stay.

Here are the most common problems that a short-rental agreement can protect you from:

Tax Consequences

The Internal Revenue Service (IRS) provides a 14-day vacation rental tax exemption. This means that if you rent out your property for less than 14 days each year, you don’t have to pay taxes on your rental income.

On the other hand, if you are required to pay taxes on your rental income, you may deduct your rental expenses such as property tax and mortgage interest.

You must keep records of the dates you rented out your property to prove that your rental income is taxable or non-taxable to the IRS. Having a vacation rental agreement will provide the proof you need in case the IRS audits you.

Guests Who Won’t Leave

Guests who won’t leave are a common vacation rental horror story. Having a rental agreement in place will give you more leverage if you end up having to formally evict your guest via the courts.

Damaged Property

Airbnb and other vacation rental platforms have insurance in place to cover damages to your property caused by guests. However, if you want to make a claim with your own insurance company, a short-term equipment rental agreement can come in handy.

Expensive Attorney Fees

A lack of documentation supporting your case increases the chances that you will lose a claim against a guest. It will also take an attorney more time to sort out who is liable for the claim to argue on your behalf if you did not have a short-term rental agreement in place.

Final Tips on How to Draft A Short-Term Rental Agreement

Your Airbnb rental agreement should also be revised and updated regularly to ensure that you adhere to any changes in local or state laws. This is essential if you want your agreement to hold up in a court of law. It also important to keep up-to-date with state and local laws in order to ensure your short-term rental agreement is a legally-binding document.

As you draft your short-term lease agreement, keep in mind that listing platforms like Airbnb and VRBO will not be able to help you enforce any special provisions within your contract.

Therefore, you must speak with an attorney if any issues with your short-term rental agreement arise. You will most likely have to settle any breach of contract in a court of law. Take a look at this suggested wording for a short-term rental contract.

Short-Term Rental Agreement Template:

Short-Term Rental Agreement

Property Address:

[Insert Property Address]

Owner/Host:

[Insert Name]

[Insert Address]

[Insert Phone Number]

[Insert Email]

Guest(s):

[Insert Full Names]

[Insert Addresses]

[Insert Phone Numbers]

[Insert Email Addresses]

Effective Date:

[Insert Effective Date]

1. Rental Property Details

The property located at [Insert Property Address] (the “Property”) is a [describe type of property, e.g., two-bedroom apartment] with the following amenities: [list all included amenities].

2. Rental Parties

The agreement is made between [Owner/Host Name] (“Owner/Host”) and the following guests (“Guests”):

[Guest Full Name, Address, Phone Number]

[Guest Full Name, Address, Phone Number]

[Repeat as necessary]

3. Rental Period

The rental period begins on [Insert Arrival Date] at [Insert Check-in Time] and ends on [Insert Departure Date] at [Insert Check-out Time]. Any changes to these dates must be confirmed in writing by both parties.

4. Maximum Occupancy

The maximum occupancy for the Property is [Insert Number] guests. Additional guests are not permitted without prior approval from the Owner/Host. Any unauthorized guests may result in additional charges or termination of the rental agreement.

5. Keys and Access

Guests will gain entry to the Property using [describe entry method, e.g., lockbox code, key handover]. The lockbox code is [Insert Code], and instructions for use are provided upon booking confirmation.

6. Rental/House Rules and Restrictions

Guests agree to abide by the following house rules:

• No smoking inside the Property.
• No pets allowed.
• No parties or events without prior approval.
• Quiet hours are from [Insert Time] to [Insert Time].
• Violation of these rules may result in penalties, including but not limited to additional cleaning fees or termination of the rental agreement.

7. Property Owner Payment Details

The total rental fee is [Insert Amount], due by [Insert Due Date]. Payment includes the following services: [list services, e.g., guided tours, transportation, breakfast]. Additional charges may apply for services not listed.

8. Security Deposit

A security deposit of [Insert Amount] is required and will be refunded within [Insert Number] days of departure, provided no damage to the Property occurs. The deposit will cover damages or additional cleaning required beyond normal wear and tear.

9. Vacation Rental Contract Fees

Additional fees include:

• Cleaning fee: [Insert Amount]
• Extra guest fee (beyond maximum occupancy): [Insert Amount]
• Late check-out fee: [Insert Amount]

10. Cancellation Policy

Cancellations must be submitted in writing. Full refunds are available if cancellation is made [Insert Number] days prior to arrival. Cancellations made within [Insert Number] days of arrival may result in forfeiture of the deposit.

11. Cleaning

The cleaning fee covers standard cleaning of the Property. Guests are requested to leave the Property in a tidy condition. Specific departure instructions and check out process include [list instructions, e.g., removing trash, washing dishes].

12. Amenities and Furnishings

The Property includes the following amenities and furnishings:

[List all included items, e.g., furniture, linens, kitchen appliances, TV, air conditioning]

Guests have access to [describe any outdoor areas, e.g., patio, garden, pool].

13. Limitation of Liability

The Owner/Host is not liable for any accidents, injuries, or illnesses that occur while on the Property or its facilities. By accepting this agreement, guests agree to indemnify and hold harmless the Owner/Host from any and all claims of personal injury or property damage.

14. Violation of Agreement

Violation of the terms of this agreement may result in immediate termination of the rental agreement and forfeiture of the security deposit. The Owner/Host reserves the right to cancel the stay without refund if guests fail to comply with the house rules.

15. Extra Clauses

Guests are not permitted to access the following areas: [list restricted areas, e.g., storage rooms, certain outdoor areas]. Any unauthorized access will result in additional charges.

Signatures

By signing below, the parties agree to the terms and conditions of this short-term rental agreement.

Owner/Host:

Signature: [Owner/Host Name]

Date: [Insert Date]

Guest(s):

Signature: [Guest Name]

Date: [Insert Date]

Signature: [Guest Name]

Date: [Insert Date]