Three reasons a vacation rental guest might sue you as the property manager

As a property manager you can remain vigilant, be responsible and have security cameras in place. But lawsuits still happen. Vacation rental guests may choose to sue a property manager for various reasons, and these reasons typically revolve around issues related to their stay, property conditions, contractual obligations, and potential harm or inconvenience they might have faced. 

Here are three primary reasons why a vacation rental guest might sue you as the property manager:

• Injury caused as a result of negligence: From tripping hazards to unsafe staircases, there’s a lot you should take into account.
• Damage to the guest’s property: It is the responsibility of property owners to take good care of their rentable spaces and ensure appropriate security measures are in place.
• Attempt to claim a refund: There are certain scenarios where the guest has the right to a refund and if the property manager declines to provide one (despite what the policy says), they might be subject to a lawsuit.

Now let’s break down the above-mentioned scenarios.

1. The guest sues for negligence or personal injury

Short term property managers have a duty to maintain their rental properties in a safe and habitable condition. Guests might consider suing a property manager if they believe they were injured due to the property manager’s negligence. If a guest sustains injuries due to hazardous conditions on the property, such as faulty electrical wiring, broken stairs, slippery floors, or inadequate security measures, they may hold the property manager liable for their injuries. Negligence claims can cover medical expenses, pain and suffering, and other damages related to the injury.

If you are renting on Airbnb, it’s vital that you understand one thing: Airbnb is merely a third party between you (the host) and your guests. The same holds true for all other OTA sites. The company only facilitates rental agreements, but it cannot be held accountable for property inspections and safety. That is solely the responsibility of the rental property owner which means you can get sued if the guest gets injured on your property.

You must ensure that the infrastructure of your vacation rental is stable and reliable, just like you would do for the home you live in. It’s also smart to think well in advance by collecting evidence about the level of safety you’ve ensured so you have them handy in case of a lawsuit. Remember: Personal injury attorneys will try their best to build a case for their clients. That’s their job.

Guests can sue hosts for an accident caused by negligence, and therefore, short-term rental insurance and security cameras are recommended.

Useful tips to avoid negligence claims:

• Regularly document the condition of your property
• Have security cameras installed (bear in mind it’s legal to have them only facing the exterior, not where a guest has an expectation of privacy)
• Take care of potential tripping hazards (e.g. old rugs with uneven surfaces, crooked floor, bulky furniture)
• Ensure your staircase is stable
• Ensure that steps and the pathway in front of the house are properly lit and free from debris so that your guests don’t slip and fall

2. The guest sues the host for their property getting damaged or stolen

As you probably realized by now, you’re the one who is responsible for providing safe temporary accommodation for your guest. This includes everything from good home security (e.g. security cameras and a solid lock on the door) and fire and flood security. However, it’s mandatory not only to protect your guests and their well-being, but also their property.

Useful tips to avoid property damage or stolen items in your short-term rental:

• Invest in a strongbox where guests can leave their valuables (e.g. money, travel documents, jewelry)
• Change the self check-in code to ensure maximum security for each guest
• Install proper burglar alarms
• Perform regular maintenance, check water pipes and smoke detectors (flood and fire can destroy your home and your guests’ property)
• Don’t miss the small things (e.g. inspect your dishwasher, your washing machine and hoses for leaks, and clean them regularly, keep an eye on your icemaker water supply line)

3. The guest sues the host for not being able to get a refund

The moment you set your Airbnb or other OTA listing, you agree to that platform’s terms and conditions. If your rental supports the flexible cancellation policy, you need to issue a refund to the guest that requests it within a time period that’s defined by the policy. The good news is that the disputes around refunds rarely make it to court.

Here are some useful tips surrounding guest refunds:

• Clearly outline the terms and conditions of the rental agreement, including check-in and check-out procedures, rules, and any potential fees. Your refund policy should be outlined as well for direct bookings especially.
• If the situation is unclear and you’re not sure if you should give a refund, ask for legal advice or support from the OTA.
• Do not jeopardize the reviews and reputation of your short-term rental by lashing out or directly arguing with the guest.

Examples of other scenarios where you might be liable as a property manager

Looking beyond lawsuits filed by guests, we thought it would be useful to mention other situations where you as a vacation rental host might be liable:

• Damage caused to a neighbor’s property: For example, if your guest causes a fire or flood, it might lead to substantial damage of your neighbor’s property as well.
• You are renting despite the fact it’s illegal to do so: Some cities have strict regulations on who can and cannot rent their home as a short-term rental and local laws vary across the country. 
• You have not regulated your tax obligations properly: Make sure to consult with a tax advisor to ensure you are paying the right amount of taxes for your property.

Property Managers can Mitigate Risk with Vacation Rental Insurance

Realistically speaking, if somebody is persistent and determined to sue you, they will. But that doesn’t mean that there are legal grounds for a lawsuit to actually reach court, let alone for them to win the case. Still, there are ways for you to mitigate risk and minimize the chances of getting sued.

Despite the host protection insurance from various OTAs, you should invest in vacation rental insurance as well. The reason why is because there are many disclaimers and exemptions written in fine print in every OTA terms of service including Airbnb. As a larger property manager with a good amount of direct bookings, self-insuring is no longer the optimal way to cover your losses. 

Safely’s Protection Policy is uniquely designed to cover the homeowner, property manager, and guest. This automatically puts all parties on the same side and neutralizes tensions. By implementing clear and concise communications and other preventative measures, property managers can create a positive and safe environment for their guests while reducing the likelihood of legal disputes and potential lawsuits.