Thoughtful policies and procedures for your vacation rental are your first line of defense against disagreements with renters and other awkward or upsetting situations.

A real estate lawyer will walk you through the contractual basics, like your reservation policies, and ensure any legal requirements are covered.

However, the essentials can vary depending on your preferences, and other guidelines outline your processes and expectations. Here’s an overview of policies and procedures you should consider.

Must-Have Policies and Procedures

Reservation policies generally cover three critical aspects of the rental process: deposits, payment options, and cancellations.


There are different types of deposits that may be applicable to your property.

  • Reservation or booking deposit (i.e. 30-50% of total): An initial payment required to hold a reservation that’s due on booking. Generally, this money is then applied towards the overall rental fee or security deposit.
  • Security or damage deposit (i.e. $200 or 10 percent of the rental fee, whichever is greater): Collected in case of damage to the property. If you have cause you can deduct from this deposit, although you should be prepared (with documentation and dated photographs) to justify your decision. Otherwise, this deposit should be refunded after the final inspection.
  • Pet deposit (i.e. $200 or 10 percent of the rental fee, whichever is greater): Collected in addition to the damage deposit in case of damage from pets. Because extra cleaning may be required whether there’s damage or not, some owners charge a daily or flat-rate pet fee instead. (See below for information about an overall pet policy.)


In addition to detailing acceptable payment options, your payment policy also outlines when payment is expected — including any special fees — and any specific terms you’ve set. For example:

  • Full payment is typically due before the rental period begins, so you can ensure any transactions clear and respond if payment is not forthcoming.
  • You may set different guidelines depending on length of the reservation; short rentals may be payable on arrival, while longer rentals may be due a month in advance.

Acceptable payment can be anything from PayPal to direct bank transfer. However, instant cash (like Western Union or MoneyGram) is not advisable; it is too often connected to scams.

Cash itself is not ideal; it can’t be sent by mail, and expecting it on arrival may leave you empty-handed; your options are limited if your renters show up without the amount needed.

Cancellation Policy

Cancellation policies vary widely and are often influenced by the local market. For example:

  • Some properties provide a full refund if a reservation is cancelled well in advance — for example, 60 days or more before the reservation date.
  • Closer to the rental day — within 60 days, for example — some properties will refund all but the reservation deposit while others provide no refunds.
  • Some owners will provide a refund only if and when the property is re-booked.

To set a policy that fits your property, consider these questions:

  • How long was the rental period, and how much notice did you receive?
  • How likely are you to fill a cancelled booking, and within what time frame?
  • Do you incur any costs from cancelled bookings (i.e. a penalty for cancelling linen rentals and cleaning services), and if so, how much of those costs can you recover?

Always account for your time and ensure you cover any losses — particularly from external service providers. For a more detailed look at how to craft a good policy and gracefully handle cancellations, refer to this advice from HomeAway.

Should-Have Policies And Procedures

While not necessarily something you need to work into your rental contract, these considerations define who you rent to and how your property can be used.

Minimum Stay

Typically, a minimum stay policy limits rentals to one week or longer in high season, and three days or longer during low and shoulder seasons. Assess what you’re comfortable with, what suits your niche market, and what’s typical for your area.

Minimum Age

Some owners set a minimum age to protect their properties from the damage that can come with graduation or college parties. These policies may dictate that any guests under the age of 25 must be accompanied by a parent or older guardian, or that the owner of the credit card used for the reservation must be over the age of 25.


In many ways, a smoking policy is based on preference. However, you should also check both your insurance policy and local bylaws for any related clauses or regulations.


No pets, some pets, all pets? There are a number of things to consider when it comes to your policy on pets — including details, like permitted dog breeds, that may be dictated by your insurance coverage.

Special Fees For Events And Extra Services

Will you accommodate special events? Are there extra fees for large groups? What other services do you provide on request? Be sure to outline any requirements or fees that are particular to your property.

When Appropriate…

Some issues may not have direct financial implications, but they can still impact your business — or your reputation with the neighbours.

  • Explain how you handle lost and found items.
  • advise your renters of local noise regulations, including quiet hours.
  • Parking can become an issue, particularly with groups travelling with more than two vehicles. Advise your renters of alternate parking options.

What policies and procedures have worked well for your business? Are there any you’ve added from your own experience?