A short-term rental listing is treated differently than one with annual renters. If a home may be rented for a few weeks between listing and closing, you may want to use the DD. Seasonal and Vacation Rentals After Closing Comprehensive Rider.
ORLANDO, Fla. – Summer is here and rentals are hot! That means you may need to use – and definitely should understand – the DD. Seasonal and Vacation Rentals After Closing Rider to the Florida Realtors®/Florida Bar (FR/Bar) Contract.
This rider should only be utilized if the seller may want to enter into seasonal or short-term rentals on the subject property – and at the time of listing, the seller hasn’t entered into those agreements.
Important note: This rider is not to be used for annual rentals. Annual rentals are handled the way they’re always handled in accordance with Standard 18(D), Lease Information. If a seller’s property is subject to an annual lease, the seller should carefully review 18(D), as well as paragraph 6. Both of those paragraphs contain important information as to how leases are handled.
Once you’ve determined that the seller may want to enter into seasonal or short-term vacation rentals agreement(s) – not annual leases – you may want to include the DD rider as part of your transaction. The rider is broken down into two sections, A and B. Here’s what each of these sections cover.
Section A of the rider breaks down the parameters for the parties in relation to a seller entering into a seasonal or short-term vacation rental agreement after the Effective Date of the sales contract but before the Closing date. Both boxes must be checked as to:
- Whether the seller is allowed to enter into seasonal or short-term vacation rental agreements.
- If the seller is allowed to do this, whether they can do so only with the buyer’s prior written approval of the rental terms and conditions, or, alternately, if the seller can enter into a seasonal or short-term vacation rental agreement without the buyer’s prior approval.
If the seller is able to enter into these types of agreements, this section also requires the seller to provide the buyer with a copy of any new or renewal agreements that the seller entered into after the Effective Date of the sales contract.
Section B of the rider specifically addresses seasonal occupancy agreements (aka seasonal or short-term vacation rental agreements) that may be in place based on a property management agreement the seller has with a third-party.
If the seller has an agreement, they must:
- Provide the buyer with a copy of all property management agreements within five (5) days after the Effective Date of the sales contract.
- If the buyer finds the terms of the property management agreement(s) unacceptable, they may cancel the sales contract within five (5) days after receiving the property management agreement(s) from the seller.
- If the buyer fails to cancel the sales contract, they’re subject to the terms of the property management agreement(s) for the duration of the occupancy agreements (aka seasonal or short-term vacation rental agreements) in place at the time of Closing of the sales contract.
Meredith Caruso is Associate General Counsel for Florida Realtors
Note: Information deemed accurate on date of publication
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