The Dos and Don'ts of Vacation Rental Contracts

3 December 2025

When it comes to vacation rental agreements, many people tend to overlook the fine print, only to regret it later. Whether you're a property owner renting out your space or a traveler seeking a temporary home away from home, understanding the ins and outs of vacation rental contracts is absolutely crucial.

A poorly drafted contract (or worse, no contract at all) can lead to disputes, unexpected costs, and legal headaches. But if you take the time to structure it properly, you can prevent misunderstandings and ensure a smooth rental experience.

So, what should you include in your vacation rental contract? And what pitfalls should you absolutely avoid? Let’s break it down.

The Dos of a Vacation Rental Contract

A well-structured vacation rental contract protects both the host and the guest. It sets clear expectations and provides the legal framework should any issues arise. Let’s go over the essential elements you should include.

1. Clearly Define Rental Terms & Conditions

One of the biggest mistakes landlords and tenants make is assuming things will go smoothly without written clarity. Here’s what should be explicitly outlined in the contract:

- Rental period – Exact check-in and check-out dates and times.
- Payment terms – Total cost of the stay, deposit amount, due dates, and accepted payment methods.
- Cancellation policies – Refund terms and any penalties in case of early cancellation.
- Occupancy limits – Maximum number of guests allowed.

This section alone will prevent most disputes that arise from misunderstandings over dates, fees, or guest numbers.

2. Specify Security Deposit and Damage Policy

No one likes to think about potential damages, but it’s always better to have a plan in place. Your contract should clearly state:

- The security deposit amount and when it must be paid.
- What qualifies as damage vs. normal wear and tear.
- How and when the deposit will be refunded.

Being upfront about these points ensures there are no surprises when the stay ends.

3. Outline House Rules

Think of house rules as the ground rules for a smooth rental experience. Your contract should cover:

- Noise restrictions – Especially for properties in residential areas.
- Pet policies – If pets are allowed, outline the specific conditions.
- Smoking rules – Indicate if smoking (or vaping) is permitted inside the rental.
- Garbage disposal & cleaning expectations – Make sure guests know what’s expected before check-out.

It might seem excessive, but clarity saves you from the classic excuse of “Oh, I didn’t know!”

4. Have a Clear Section on Liability and Insurance

Liability issues can get messy if not properly addressed. Your contract should detail:

- Who is responsible for any injuries that occur at the property.
- Whether renters’ insurance is required for guests.
- What is covered under the property owner’s insurance.

This ensures that both parties understand their responsibilities and prevents legal disputes in case of accidents.

5. Include Contact Information and Emergency Procedures

Unexpected issues can arise—plumbing leaks, power outages, or even lockouts. Provide clear contact details for local resources such as:

- Property management or the owner's direct contact.
- Local emergency numbers.
- Instructions on how to shut off utilities in case of an emergency.

This makes sure your guests know exactly what to do if something goes wrong.

The Don’ts of a Vacation Rental Contract

Just as some elements must be included, there are also critical mistakes that should be avoided at all costs. Here are a few things you should never do in a vacation rental contract.

1. Don’t Leave Out Cancellation and Refund Policies

A vague or missing cancellation policy is a formula for disaster. If a guest cancels at the last minute, are they entitled to a full refund? What about a week in advance?

Be as specific as possible:
- Will they receive a full or partial refund?
- Is cancellation allowed at any time, or are there cutoff dates?
- Under what circumstances (e.g., natural disasters, emergencies) would you offer a full refund?

A well-defined policy minimizes frustration for both parties.

2. Don’t Make the Contract Overly Complicated

Legal jargon can be intimidating, and if your agreement is 15 pages long with dense legalese, no one’s going to read it. While including necessary legal terms is important, keep it simple and understandable.

Use clear language and straightforward terms. Otherwise, guests might accidentally violate rules they didn’t fully grasp.

3. Don’t Forget to Address Unauthorized Guests or Subletting

Imagine renting out your vacation home to a small family, only to find out they turned it into a venue for 20 guests. Nightmare, right?

Your contract should make it clear:
- No unauthorized guests beyond the agreed number.
- No subletting or third-party bookings without approval.

This ensures the property is being used responsibly and prevents unexpected wear and tear.

4. Don’t Overlook Local Laws and Regulations

Each city, state, or country may have different requirements for vacation rentals. If your contract doesn’t comply with local laws, it may not be enforceable in a dispute.

Check regulations related to:
- Short-term rental zoning laws.
- Taxation (e.g., occupancy taxes).
- Required permits or licenses.

Failing to comply can lead to fines or legal action, so always do your homework.

5. Don’t Forget to Get a Signed Agreement

A verbal agreement or a simple email confirmation might seem like enough, but if things go sideways, it’s your written and signed contract that’ll protect you.

Ensure both parties:
- Read the contract in its entirety.
- Ask questions if they need clarification.
- Sign (either digitally or physically) before the rental period begins.

This seals the deal and makes sure both sides are legally bound to the agreement.

Final Thoughts

A vacation rental contract might not be the most exciting part of planning a getaway, but it’s absolutely essential for protecting both hosts and guests.

By including clear terms, outlining expectations, and avoiding common pitfalls, both parties can enjoy a stress-free experience. Think of the contract as your safety net—it ensures that if anything goes wrong, you’re not left hanging without protection.

So, whether you're renting out your property or booking a vacation home, make sure that contract is solid. Because at the end of the day, you'd rather spend your vacation relaxing than dealing with unexpected rental disputes, right?