RESOURCES: What to include in a rental agreement

Putting your terms and conditions in writing protects both you and your renters and helps prevent disputes.

  • Created: 01-Jun-2010
  • Updated: 21-Feb-2011

In February Scott booked a four-day Easter stay at a bach in Taupo and paid a 25 percent deposit. Two weeks later, an unforeseen family problem meant he had to cancel his holiday. Because he cancelled more than a week after confirmation of his booking, the bach owner didn’t refund his deposit, and it took some weeks for the two to settle their dispute over $150.

Refunds are one of the most common sources of disagreements between bach owners and renters and can be avoided by having a written agreement in place that states terms and conditions regarding cancellation.

It should also include your rules regarding maximum number of occupants, pets, camping, bonds, smoking and so on.

Fiona’s bach sleeps six people. She rented it for a weekend to a group of six people, which became 10, but because she hadn’t clarified the maximum number of occupants allowed and because the stay was complete when she discovered the extra guests, she wasn’t able to charge extra for them.

When Alan rented his bach to a family for a week in summer, he discovered they’d invited a second family along to stay in tents on the back lawn. They hadn’t asked permission and he didn’t welcome camping on the property, but again, this had not been stated upfront.

A formal written agreement protects both parties and the process of drawing one up, and using it, doesn’t have to be onerous. It is also useful as an information-gathering exercise, giving you the opportunity to collect details such as car registrations.

One way to approach it is to reply to booking requests with a PDF that lists terms and conditions. If the renter agrees to the T&C, they pay a deposit and receive confirmation of the booking with an invoice for the balance. The confirmation might include details such as the names of both parties, arrival and departure dates, moneys received and owing – so it’s all in writing, stated upfront and clearly laid out for both renter and owner.

What should a written agreement include?

Start with the basics

The names and full contact details of both parties and the agreed arrival and departure dates. The latter is important if you have one group checking in on the same day another group is checking out.

Your policy might include the following:

  • What percentage of the total cost of the stay do you require as a deposit?
  • When is it due?
  • How should it be paid?
  • When is the balance due?
  • If your policy is to cancel the booking if the balance is not paid on time, make sure you state this.
  • Can a deposit be transferred to another booking if the renter postpones rather than cancels?
  • Make it clear that once a deposit is received, the booking is confirmed.

Your cancellation policy

Make sure your cancellation policy is simple and that you honour it. Consider including the following:

  • Do you offer a refund in the event of the renter cancelling?
  • If so, what period of notice do you require? For example, if a renter cancels in writing within seven days of confirmation, you might choose to refund their deposit in full, but if they cancel later, you might refund a percentage of the deposit only, or offer no refund at all if you are unable to find another booking for the specified dates.
  • You could also ask the person booking if he/she is willing to re-book at a later date and transfer the payment to that date.

Should you ask for a bond?

  • If your bach is booked for a longer stay; say, two weeks, you might consider asking for a bond, to cover possible damage or loss.
  • The amount you require is up to you, but most range from $100 to $500.
  • A potential problem with bond payments is if you are operating a legal trust account; if the bond is paid in cash, you have to pay it back in cash.

Cleaning the bach

There are basically two options here:

  • Charge a cleaning fee for each stay; or
  • Ask renters to leave the bach as they found it. Include as much detail as you think helpful regarding minimum standards of cleaning.

House rules

This might include conditions such as:

  • The maximum number of occupants allowed
  • Whether certain areas of the property are not available to guests
  • If pets are allowed and if so how many, and where on the property are they permitted
  • If smoking is permitted and if so where
  • Whether you allow camping (tents or caravan) on the property

Your responsibilities as the owner/property manager

This could include:

  • Provide and maintain the premises in a reasonable condition.
  • Fair representation of the property on Bookabach.co.nz
  • Allow the tenants quiet enjoyment of the premises
  • Comply with all building, health and safety standards that apply to the premises
  • Not interfere with the supply of services to the premises
  • Return bond promptly

The responsibilities of the renter

This might include:

  • Leave the premises in a clean and tidy state.
  • Use the property principally for residential purposes.
  • Not damage or permit damage to the premises, and inform the Property Manager of any damage.
  • Not disturb the neighbours or the landlord’s other tenants.
  • Not alter the property without the Property Manager’s permission.
  • Not use the property for any unlawful purposes.
  • Leave the property clean and tidy, and clear of rubbish and possessions at the end of the tenancy.
  • At the end of the tenancy, leave the keys as agreed with the property manager.
  • Leave all chattels supplied with the tenancy.
  • Not exceed the maximum number of occupants stated in this agreement.

Using your rental agreement

You can have a robust written agreement in place but decide to offer more flexibility in certain circumstances in order to encourage potential renters to book again at some time in the future – that could include refunding a deposit if you can find another booking for the cancelled period.

If you do have a written agreement, you need to have the confidence to trust it and be able to enforce it if necessary.

We recommend that you ask your family or property lawyer to review any written agreement that you draw up. Bookabach does not dictate rental terms or provide legal advice.

Finally, once you have a written agreement, you need to have the confidence to trust it and be able to enforce it if necessary.