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Airbnb Property Management Agreement
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What is an Airbnb Property Management Agreement?
What does it take to run a successful Airbnb? Well, a couple of things such as picking a strategic location, and offering your guests a five-star experience. But most importantly, your venture should be founded on a solid Airbnb property management contract.
This is an agreement that governs the relationship between a property owner and the entity be it an individual or agency managing their property. It lays out the terms and conditions that the managing agency and property owner have to abide by. A successful working relationship between these parties guarantees that guests get nothing short of a memorable experience during their stay.
When do I need an Airbnb Property Management Agreement?
If you’ve enlisted the help of a property management company to run your Airbnb, you must have a contract in place. It’s the best way to protect your investment.
Sure, it might take some time, perhaps even cost you money, to craft one. But at the end of the day, you have a legally binding document highlighting the terms that guide the relationship between you and your Airbnb’s property manager.
What are the Key Clauses in Airbnb Property Management Agreement?
Parties to the agreement – The contract should contain comprehensive details of all the parties involved that is names, physical addresses, and telephone numbers.
It’s particularly important in instances where a property is owned by several people. Similarly, a property management agency may have different staff, each of whom is tasked with managing a particular property. Thus, a contract helps to clarify the specific persons involved in the deal.
Property in question – This applies to owners who have several units that they rent out for Airbnb services. If this is the case, the contract details the specific location of the property that will be managed.
Whenever necessary, the owner can provide additional details about the property. These include the number of rooms, furnishings and what condition they are in, entertainment sources (if any), internet services (if any), among others.
Obligations of the property manager – The contract should outline all the duties of the property manager. Depending on the remuneration, and level of the owner’s engagement, these could include:
Property leasing – During the term of the agreement, the manager is responsible for leasing the property on behalf of the owner. This entails advertising the property on Airbnb websites, reviewing potential candidates, and even coming up with a reasonable and fair rate to charge guests.
Fee collection – Since the management agency will be dealing directly with the guests, it’s also in charge of collecting payments, and subsequently, issuing receipts to guests.
In that regard, the contract should explain the proportion of this revenue that will be paid to the owner. It should also specify when and in what manner the property owner will receive their income.
To avoid conflicts related to payment schedules, it’s a good idea for the property manager to maintain proper financial statements. This way, the property owner can always refer to these records in case they need any clarification.
Creating house rules – Apart from collecting rent, the property manager is also tasked with creating the guidelines that guests have to follow. These include simple regulations, such as setting check-in and check-out times to more complex ones like ensuring that guests don’t:
- Don’t hold any parties or events
- Don’t eat or drink in areas other than the dining room
- Leave clean rooms upon checking out
- Turn off lights and heating appliances when no one is around
Obligations of the property owner – You’re probably thinking, why does the property owner have to do anything yet they’ve hired a managing agency?
Well, the landlords or property owners aren’t entirely off the hook. There are a few things left to do such as:
Setting up and maintaining a reserve fund – It’s advisable to create a reserve fund, which the management agency can use for day-to-day operations.
This money will be used to maintain your property and for emergency issues. For instance, if the tap starts leaking, a dishwasher breaks, a water pipe breaks, while a guest is residing at your property, it can be used for a quick repair.
Obtain insurance – Another role of the property owner is to get adequate coverage for the property they’re letting. This protects them from legal consequences in case an individual gets hurt or their property gets damaged during an insured stay at their place.
Compensation – One of the most important clauses in the Airbnb property management contract is remuneration. This part explains the specific amount of money the company/manager will receive for managing the property.
Landlords should be cautious when evaluating this section. They shouldn’t automatically write off companies that charge higher fees. Chances are, management firms that ask for lower fees ask for a lot when it comes to handling other tasks. For instance, they could ask for a high commission when they manage to fill vacancies or conduct maintenance.
Terms of termination – The termination clause in another crucial aspect of this type of agreement. It defines the procedure to be followed when terminating a contract.
Often, the parties agree to give each other a 30 days’ notice before dissolving the relationship. If either party decides to terminate the contract prematurely, they may be charged a fine.
Another point that should be included in this section is the reason(s) for terminating the agreement. For instance, a property owner may want to end the contract if the manager doesn’t find a guest within a specified period.
Contract duration – The agreement states the precise duration during which the contract remains valid. For property owners, it’s advisable to start with a short-term deal. This way, you can gauge the property manager’s performance before deciding to commit to a long-term partnership.
An Airbnb property management contract is made between a landlord/property owner and the firm hired to run it. The document outlines the specific parties involved, the manager’s duties, and the tasks that remain with the landlord.
This contract is beneficial to both the property owner and the management team. On the part of the owner, they know that the manager will be responsible for finding new tenants, collecting fees, and ensuring their property is well-maintained. On the part of the property manager, the contract indicates terms of termination, payment and liability issues.
Got a Contract Question?
Send us the contract with your questions or requirements. We will then provide you a fixed price quote to answer your questions, or to provide a general review of the contract.