Working Out The Essentials Of Your Vacation Rental Agreement – Part 2

Oct 8, 2014

Rental owners are required to be specific with respect to their vacation rentals while working out the agreement with their guests. Apart from the main aspects such as working out the rental conditions, it is also important to consider a few other nitty-gritty which may not appear to be so important in the first place, but which can cause some serious concerns later on if they do occur. People generally tend to learn from their past experiences and mistakes they have made over the years, but when finance is concerned, a few of those mistakes may well prove to be very serious and damaging. Vacation rental owners ought to participate more in online social media gatherings. It is one of the best ways of knowing what types of issues are faced by other individuals – property owners and renters alike. By knowing something, you can be forewarned about its implications, and it pays to be prudent by taking a few preventive steps which may help you to avoid the issues from occurring in the first place. A few pointers may help you consider certain aspects which you could include in your rental agreement. (in addition to the essentials of contract listed in Vacation Rental Agreement Part 1).

Specifying the damage deposit and penalties

Home occupiers can be careless. More than often what one might think, guests or renters loose keys or access cards to the homes, or even end up damaging the furniture or other amenities included in the package. While such incidents may be accidental, they can well may be intentional owing to a lack of proper attitude concerning their occupancy. In such cases, it is important for the rental owner to create provisions which can compensate for the damage or loss caused. The damage deposit is such a guarantee. You should charge a certain amount in terms of damages in the event they do occur, and it should reflect within the rental agreement. The agreement should also include what penalties the guests are liable to pay if they fail to return the passkeys in time, or simply forget to return it. The expenditure incurred in getting things repaired could well be much higher and more substantial than the profit earned out of the rental.

Defining a cancellation policy

Contrary to the belief, it is more difficult for rental owners to deal with cancellation issues compared to hotels which do not find it so difficult to book new guests. While some hotels refund the booking amount as late as 24 hours before the check in date, rental owners are often at a loss how to go ahead with the deposit refund. It is not so easy to find new occupiers when the notice is served at the last minute before occupying the rental. The owners can well lose out on several months of rental money if they are not informed in time about the cancellations. A proper way of dealing with such issues is to define a cancellation period in the agreement, which could range from 30 to 60 days, or even 120 days if the rental is booked for an extended duration. Failure to adhere to the cancellation policy could lead to a certain penalty to compensate the rental owner.

Stating occupancies and visits by non-occupiers

It is good to specify how many individuals can reside in your rental and who can be invited over. While some guests book their actual occupancy for a certain number of occupiers, they may well “invite” a few friends along who might “just happen” to spend time with them. It’s a way of cutting corners with the rental amount and getting more people to stay at lower rates. While it is required to be strict as to how many individuals can stay, the agreement should well support a few impromptu visits by acquaintances and friends who may drop in for a couple of hours to enjoy a coffee or a couple of drinks.

Agreement conditions waiver, amenities, services, and parking

If you have a guest who has a certain requirement that is against, or not covered, in your rental agreement, and if you feel inclined to provide an exception to your occupancy terms and conditions, it is advisable to offer the exception in writing. It could well be a way out for yourself in the event your guest decides to litigate against you at a subsequent date with a breach of agreement or contract clause. Moreover, you should also specify exactly what kinds of amenities are included with the package, and what types of services you are likely to provide in the agreement.

Acts of nature and trip insurance

In rare cases, rental owners face a situation where in it becomes difficult to determine who is at fault, and whether the owner is liable to refund the cancellation fees. In case of ocean or beach houses, at times occupiers are forced to vacate their occupancy due to storm warnings. In such cases, the guests are certain to demand a refund for their pending stay. The rental agreement should reflect the condition regarding the trip insurance – the owner is not liable to refund the rental amount in case of unforeseen circumstances or an act of nature.

Home Owners Association rules applicability

The rental properties owned are often subjected to the Home Owners Association rules, and all occupiers are liable to obey them. Failure to do so might incur a penalties or a lawsuit. The home occupiers have to follow the HOA rules and regulations in addition to the specific rental terms and conditions specified in the contract. The rental agreement should include the HOA aspect.

Legal jurisdiction in case of a lawsuit

In the event you face a litigation, ensure you can present yourself to the local court. The agreement should enforce this condition. It is a safety measure to save unnecessary travelling expenses and waste time in the event of a legal dispute.

Considering the suggestions you may well benefit from an effective agreement that can help you to avoid unforeseen and unwanted circumstances.