Managing An Airbnb Property? Here’s How To Keep Yourself Protected

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If you’re looking at getting into the property management business, it’s important to make sure you have the right contract in place.

Generally, you could call this a Service Agreement. This is a contract that sets out the terms of your service in managing the property, covering all bases from payment to liability limitations.

But, if you’re managing Airbnb property, it can be a little more tricky.

This is because Airbnb’s terms and conditions already set out a contract between hosts and guests and, if you’re the one managing the property, you want to make sure you’re protected, too.

In this case, you’ll need what we call an Airbnb Property Management Agreement.

What is this agreement? Why do you need it? And how can it protect your business?

This article will walk you through how to make sure you’re doing it right.

What Is An Airbnb Property Management Agreement?

Put simply, an Airbnb Property Management Agreement is a contract between you and the property owner.

The document will set out the terms by which you’ll manage the Airbnb bookings — such as payment, service scope, property damage, landlord approvals and insurance coverage.

When starting your property management business, here are some questions you should be asking yourself:

How does your service work? What’s included and what isn’t included?
Do you offer cleaning services?
What happens if something is damaged?
Is the property allowed to be listed on Airbnb?
Do you have insurance?

Generally, Airbnb managers will manage bookings, respond to guests, help with check-in processes, manage the cleaning and ensure that everything runs smoothly.

In return, you would ordinarily take an agreed percentage of the property owner’s booking fee.

But what if something goes wrong?

This is where a contract comes in.

Why Do I Need The Contract?

As a property manager, having a contract between you and the property owner ensures that you’re both on the same page. It can save you a lot of headaches down the track, because it makes the terms of your service clear from the very start.

Below are some important things to consider including in your Airbnb Property Management Agreement.

Scope of Service

It’s really important to make sure that the scope of your services and the extent of your liability is included in a contract.

Property owners may sometimes assume that your service involves a lot more than you promised because it was never clarified and put down in writing. It’s best to set things straight from the start!

Property Damage

When you’re the person responsible for dealing with the guests, the owner may assume that you’re also going to be responsible for any damage they cause to the property. But you wouldn’t want that!

As such, it’s important to make sure these terms are clearly set out in a contract.

This prevents any misunderstanding from both ends. The last thing you want is a relationship going sour with property owners, leaving you in a position where you haven’t been properly reimbursed.

Termination

If you don’t set ground rules around termination periods, this leaves you at risk of not having secure revenue streams.

Without a contract, an owner could cancel your services without notice, leaving you without an important client.

Authority

Another common issue among Airbnb property management businesses is obtaining landlord permission.

Airbnb managers should be careful not to work with tenants who do not have landlord permission to use that property on Airbnb.

What this means is that Airbnb hosts might be listing their properties on the Airbnb platform, but their lease may not actually allow them to do that under their Lease Agreement.

There can be huge risks for property managers if they don’t check whether the property is legally allowed to be listed on Airbnb. A good lawyer can advise you on how to keep yourself protected from these risks.

What Else Should I Consider?

Starting an Airbnb is exciting stuff, but you also want to make sure you’re legally protected. An Airbnb Property Management Agreement is a good start, but is there anything else?

Like any business, you need to ensure you look into the specific laws of the state or territory you’re operating in. This is because some laws differ between states which could affect your business contracts and consequently the level of protection given to your Airbnb.

In this case, it’s wise to seek the help of a legal expert who can advise you on the laws that apply to you in your specific region.

Another way you can further protect your Airbnb is by registering it as a company. Registering your business under a company structure allows you to protect your liability in case anything goes wrong. So, if things don’t go to plan and legal responsibility needs to be taken, this responsibility falls on your company as a separate legal entity, rather than you as an individual (in other words, your personal assets are safe!).

Need Help?

Having a good lawyer draft an Airbnb Property Management Agreement ensures that you’re protected as much as possible from these risks.

If you need help getting a contract together for your property management business, we’re here to help! You can reach us on 1800 730 617 or team@sprintlaw.com.au.

Regie Anne Gardoce

Regie is the Legal Transformation Lead at Sprintlaw, with a law degree from UNSW. Regie has previous experience working across law firms and tech startups, and has brought these passions together in her work at Sprintlaw.

Amelia Abbott

Amelia is a commercial lawyer with a background in major projects, IP and IT outsourcing. Before joining the Sprintlaw team, Amelia worked at two national law firms and completed her studies in Law and Psychology at the Australian National University.