Guest agreements are essential to protecting owners, guests and property managers. But given how important and widely used these documents are, management companies don’t always spend the time required to optimize them. Just as with owner agreements, it pays to create customized guest agreements that reflect your priorities.
As members of the in-house legal team at Vacasa, it’s our job to protect Vacasa, which, by extension, also means protecting our owners and helping provide our guests with an outstanding rental experience. While these tips don’t constitute legal advice, they will help you understand the most important parts of a guest agreement.
Here are four things your guest agreement should do:
1. Answer the Four Ws.
To clearly establish what is and is not allowed on the property, your guest agreement should answer the four Ws: Who, where, when and what.
- Who is renting the property? What is the maximum occupancy? Are pets permitted? Who should the guest contact if an issue arises?
- Where is the property located? Where are guests allowed (and not allowed) to park?
- When can guests arrive, and when must they leave? When is payment due? When can a guest cancel and still get a refund? When are they allowed to play music or make noise on the property?
- What are guests allowed (and not allowed) to do on the property? For example, can they smoke? Can they erect temporary structures, like tents? And what are the consequences for violating the rules?
2. Be readable.
Your guest agreement should be written in plain, direct language. Headings and bullet points will make it fast and easy for guests to grasp salient points. The clearer and more straightforward your guest agreement, the better the chances your guests will follow the rules (and the stronger your position will be if you do need to enforce those rules). If your guests or employees have trouble understanding your agreement, it needs to be more transparent and approachable.
Bear in mind that while owner agreements typically set out the rights and responsibilities of both parties in great detail, a guest agreement is essentially just a list of rules — it lays out what guests can and cannot do, and under what conditions. And while you have an ongoing relationship with homeowners that allows you to revisit owner agreements when necessary, guest agreements are your one shot to communicate your needs and expectations to guests.
Many vacation rental management companies, including Vacasa, allow guests to read and acknowledge guest agreements online. If you allow online acceptance, be sure that the guest clearly indicates their understanding and acceptance of the terms of the agreement.
3. Clearly reflect expectations and repercussions.
With guest agreements, anything you (or the owner) think is important must be in the guest agreement with a clear, enforceable consequence if breached. If you don’t state that smoking is prohibited, you can’t be surprised when people smoke in your home. On a similar note, it’s important to educate your employees about the content of your guest agreement, so that they don’t give out contradictory information. Conflicting information — like a reservations agent inviting a guest to bring their dog when your guest agreement prohibits pets — can invalidate the agreement.
Guest agreements should also include explicit, enforceable companion terms. For example, if you want to prohibit smoking, state a fine of a specific amount for violating this aspect of the agreement. A simple “no smoking” provision is less motivating for guests than the warning, “There will be a $200 fine if you smoke on the property.” And keep your fine amounts reasonable — do some research if you’re not sure what’s standard for your local market. Much as you might like to charge a $10,000 fine, that term will be almost impossible to enforce.
It’s also wise to distinguish between legal aspects of the agreement and general rules. For instance, if the community pool is open till 10 p.m., you might not want to impose a fine on guests who violate this rule. Instead, you can do your part to clearly communicate the policy, perhaps by posting a sign in the home near the towels and pool toys.
4. Customize for your business.
It’s crucial that your guest agreement reflect the way you actually do business, so that you are in compliance with your own agreement. For example, if you don’t collect damage deposits from guests, your guest agreement shouldn’t mention them. Liability waivers should reflect your home’s particular features, like a balcony, pool or hot tub. If your home is located in a multi-unit property, the community will probably have its own rules that guests are expected to abide by. Similarly, cities and counties often have specific laws regarding short-term rentals that should be reflected in the guest agreement.
This is why we recommend against boilerplate contracts that you haven’t carefully reviewed with an expert. An attorney familiar with the short-term rental market can make sure your guest agreement accounts for the specific aspects of your business, property and community. Also consider adding terms that protect you (and the owner) if guests violate the terms of the guest agreement and that generally limit your liability in certain circumstances. An attorney who is familiar with your state’s laws can help craft these clauses.
Keep in mind that your guest agreement is part of your overall risk mitigation strategy, which includes owner agreements, guest security screenings, recruiting the right employees, insurance and more. Guest agreements don’t just protect you and your guests; they also protect owners. To cover all your bases, it’s critical to look at your risk mitigation strategy holistically — which is another way that a legal expert can be invaluable.
Finally, we advise revisiting your guest agreement at least once a year, to ensure that it continues to reflect the way you operate. At minimum, you should revisit your guest agreement whenever there’s a significant change in your business operations — like an acquisition or a big expansion or a change in applicable law.
(Note: The recommendations in this article only apply to the short-term rental market. Leases subject to landlord-tenant laws are entirely different and usually more complex.)
Written by Evan Osborn, General Counsel and Bryan Geon, Corporate Counsel