Homeowners wishing to use their properties as short-term rentals should always use a short-term lease agreement for each reservation. While certainly not exhaustive, provisions to be included in a short-term lease agreement include:
Identity of Guests
Every adult who intends to use the property should be a named Guest, and each adult should sign the agreement. Homeowners are more fully protected if each person using the property is legally responsible for all terms of the agreement, including the full amount of the rent and the proper use and maintenance of the home. If all permitted Guests sign the agreement and consent to joint and several liability, a homeowner may legally seek the entire rent from any single Guest if the others do not pay. Additionally, if one Guest breaches an important provision of the agreement, the homeowner may terminate the agreement for all Guests who have signed.
Every agreement should clearly specify both that the rental unit is only to be used by Guests who have signed the agreement (and their minor children if permitted). Such a provision protects a homeowner’s right to approve who occupies the property – ideally, those who have been vetted and approved – and to limit the number of occupants so that Guests may not move in their friends, relatives, etc.
Local law may restrict how much of a home may be rented. A land use ordinance may prohibit the rental of a single room in a larger dwelling or the entire home to multiple unrelated parties.
A short-term rental agreement should be clear on the leased space.
Prohibition on Sublets and Assignments
Subleases of short-term rental properties could cause numerous problems for a homeowner. Accordingly, the agreement should always prohibit any type of sublease or assignment. Conversely, the agreement should expressly permit the right of the homeowners to assign their rights and obligations to a purchaser or a property management company.
Length of Stay
Many cities have local laws imposing rental taxes on rental terms that are less than a given time frame. Many states have Landlord Tenant Laws that will afford a person statutory right given to a tenant as defined by those laws if the rental term is not limited to a certain term. Many planned communities have minimum or maximum terms that a property may be rented.
An agreement should be clear regarding exactly when rental guests may arrive and when they are expected to leave. Be sure to additionally spell out any penalties (within the law) for failing to vacate the rental as set out in the agreement.
Of course, any rental agreement should specify the amount of rent to be paid, when the rent is due, whether any amount is due upon reservation, whether amounts paid up front are refundable, acceptable methods of payment (will the homeowner accept credit cards?), where rent should be sent, etc. The agreement should also expressly set forth any late fees, interest chargeable, returned check charges, etc.
Deposits and Fees
Rental agreements should be very specific regarding requirements surrounding security deposits, acceptable uses of the deposits, and any portions which are non-refundable (i.e., cleaning or pets). Homeowners should be sure to check local laws governing security deposits which may limit the amounts to be collected. The agreement should specify that the homeowner may use the deposit to clean or repair damages and that the tenant may not use it as a rental payment. The agreement may also specify walk-through procedures and the process for return of any unused security deposit.
Even short-term rental agreements should include provisions addressing repairs and maintenance of the home. The renters’ responsibilities should be clearly set out in the agreement. It should be clear that it is the renter’s responsibility to keep the property clean and sanitary and to pay for any damage caused by his or her abuse or neglect.
The agreement should prevent any repairs or alterations by the renter.
Finally, the agreement should require that the renter immediately alert the homeowner as to any damaging, defective, or dangerous conditions on the property. For example, a leaky ceiling or an exposed electrical wire could do serious damage if not dealt with immediately. The agreement should include provisions mandating the immediate notification of the homeowner of such conditions, as well as an explanation of how the homeowner will handle the issue.
Entry of Owner
A rental agreement should make clear that the homeowner is permitted to enter the property without notice in case of emergency, and with reasonable notice in all other cases for any purpose. It is a good idea to specify exactly how much notice will be required and how such notice will be provided. Such provisions may avoid later disputes regarding unauthorized entry or violation of renter’s privacy rights.
Any house rules (e.g., no pets, no smoking, etc.) should also be clearly delineated. If pets are not allowed, the agreement should expressly say so. If pets are allowed, special restrictions such as limits on size, type, number of pets, or a requirement that the tenant will keep the yard free of all animal waste, should be spelled out as well.
All rental agreements should include provisions prohibiting disruptive behavior, such as excessive noise or illegal activity.
Important rules and regulations covering parking and use of common areas, as well as any penalties for failure to comply with those rules, should be specifically mentioned in the agreement. Additionally, homeowners should include indemnity provisions requiring tenants to cover the costs of any lawsuits or other claims brought against the homeowner due to activities of the tenant during the rental.
Penalties for Breach
A “choice of law” clause specifies which country or state’s law will be used to settle any dispute that arises under the lease. This is especially important where the contracting tenants are often residents of other areas.
Homeowners should include indemnity provisions requiring tenants to cover the costs of any lawsuits or other claims brought against the homeowner due to activities of the tenant during the rental. Finally, homeowners will only be able to collect attorneys’ fees and expenses in the event they need to take legal action against tenants if a provision for such fees is included in the agreement.
Pittsburgh Real Estate Attorneys
When drafting or reviewing your short-term lease, it is advisable to consult with a real estate attorney for guidance. Krista Kochosky chairs the Real Estate practice at The Lynch Law Group. For questions regarding your lease or to schedule a consultation, contact her at firstname.lastname@example.org, or by phone at 724.776.8000.