Avoiding the Long-Term Renter Blues
By William May
Published: 07/14/03 Topics: Comments: -
Getting visitors who stay long term and still pay higher short-term rates sounds great. But such guests can lead to unexpected problems - and the problem is legal.
Many states differentiate between short term "Guests" and long term "Tenants." Frequently the difference is whether they stay for over or under 30 days. Anything under 30 days and the visitor's stay is governed under "Lodging" statues. 30 days or over and they may be governed under "Landlord Tenant" statues.
What's the difference? Basically long term Tenants have far more rights. They can withhold rent if a landlord doesn't fix repair problems. Landlords are prohibited from entering a rented home without reasonable advance notice to the Tenant (except in emergencies or when the Tenant can not be reached) Even if a tenant doesn't pay, or abuses the property or neighbors it can take owners months to evict them. And there are great many other restrictions on how you can manage a long-term rental.
On the other hand short term Guests have far fewer rights. Because such visitors are provided more services in traditional lodging (such as linens, room service, etc) and because they often share closer-quarters landlords are given more discretion in setting guest rules and managing guest behavior. Laws vary but usually you can immediately evict a guest for not following your written lease or rules. You can set limits on how many people are in the unit, how they are and can require every guest to register by name and address. To manage a unit to what would be the satisfaction of most guests owners can enter a unit simply by knocking on the door and, if the unit is unoccupied can enter and car for the place.
Maybe that's another reason why many owners prefer short-term guests.
As you will hear us say repeatedly its important to have a good written guest agreement - one that should reiterate your short-term owner rights. Be sure to ask your attorney to make sure it specifies that guest tenancy is governed under your states "Lodging" laws and not under the Landlord Tenant laws.
TIP: Avoid accepting long term (30 days and over). Even if your guest agreement says its a "Vacation Rental" or a "Short Term" rental a judge might decide that anything 30 days or over is really a long-term lease. The solution - when someone says they want a 30 days lease ask them which dates they want and then try to sell them something even a day short of 30 day. I know that can be money out of your pocket but getting hit with a landlord tenant lawsuit will cost you lots more.
TIP: Requires all guests, even those 30, 60, 90 or more days long to pay in advance. This is the only correct policy for short-term rentals by the way and not waiting for payment will eliminate most heartaches.
TIP: For long stays - say 90 days, have the guest sign three different leases, each for 29 days. With payment due weeks in advance of each new lease. That way you'll know early if they don't pay and you can exercise your right to cancel for failure to pay. (You do have that in the Guest Agreement anyway, don't you?
TIP: Be sure to download the sample Guest Agreements from the VRIA forms and contracts page.
TIP: If you do have to sign a long term "Lease" be sure to require and check each Tenant's credit and references prior to occupancy.
TIP: Require Tenants to pay like they do for true long-term leases. First month, last month and a damage deposit of at least one month's rent. All paid in advance.
TIP: Require weekly, bi-weekly or monthly cleaning and charge them for it. Not only does that keep the place up but allows you an opportunity to do an informal inspection. Keep your eye on them.
TIP: Consider joining your state's Hotel and Lodging Association (Most have one). They'll usually have legal information, sample contracts or an attorney on retainer to help you understand the law.
TIP: Don't expect your attorney to have all the answers. He'll know how to draft an agreement but won't necessarily understand the nuances of the problems you face. Do your own homework, get your attorney's help and then work diligently to avoid those long-term tenants from hell.
Author: William May – Volunteer, Vacation Rental Association
Blog #: 0018 – 07/14/03