Short-Term Lease Agreement

What is a Short-Term Lease Agreement?

Short-Term Lease Agreement, sometimes also called a Short-Term Rental Agreement, is a document that outlines the responsibilities of the person renting out the physical space, often called a Lessor, and the short-term tenant often called a Guest.

In short-term rentals, the property is leased for temporary or seasonal use, and not for any other use such as commercial or residential use in a landlord-tenant relationship. A short-term rental is different from a Subtenancy Agreement, as these are for residential purposes. Like a vacation rental, a short-term rental agreement is not a full lease. It's a temporary short-term arrangement.

Is it mandatory to have a Short-Term Lease Agreement?

No. Having a Short-Term Lease Agreement isn't mandatory, but it's highly recommended to prevent disputes. In all Lessor-Guest relationships, even including those that exist between friends or family members, having a written lease that outlines all of the terms and conditions of the rental is important. Having everything agreed to in writing may help deal with disputes.

What must a Short-Term Lease Agreement contain?

Short-Term Lease Agreements must contain a duration clause, which can be for as little as a few days, or up to a few months.

The lease should also contain a maximum stay clause to prevent guests from being deemed as tenants, which provides them with legal rights under Residential Tenancies laws.

In a lease, the lessor gives basic information about the rental property, including:

• The rental cost: this is the applicable rate to rent the property. For example, the rate may be $900.00 per week.
• When and how the payments should be made: this is the method by which the lessor will agree to take payment, which can include credit card, e-transfer, etc.
• What the term is: this is the duration of the stay. In other words, it's the check-in and check-out dates.

Also, there are specific details including what areas can and can't be used, whether pets are allowed, whether smoking is permitted, how the trash gets disposed of, and more.

What is not allowed in a Short-Term Lease Agreement?

A Short-Term Lease Agreement cannot contain a clause that indicates the Guest is a tenant. If the situation is a traditional long-term lease, like an apartment lease, for example, a standard residential lease agreement is the document needed, which is usually a prescribed government document.

Before using this document, it is preferable that the lessor verifies with the municipality in which the rental property is located to determine if short-term rentals are allowed. Some municipalities have restrictions and rules regarding short-term rentals.

Who can enter into a Short-Term Lease Agreement?

A lessor who owns property that is being leased can enter into this agreement with any guest. However, in order for the lessor and the guest to be able to sign the document, they must be of majority age. While the guest is normally an individual, it's possible that the lessor is a business entity, either:

• A corporation: the lessor may be a corporate entity because it runs a seasonal business such as cottage rentals during the summer or a hunting lodge.
• A partnership: the lessor may also be a partnership.
• Other: it's possible the lessor operates a non-profit or other type of entity.

Who cannot enter into a Short-Term Lease Agreement?

Anyone under the age of majority or anyone with a disability cannot enter into a Short-Term Lease Agreement. Also, the lessor signing the agreement should be the property owner. The lessor can appoint an agent to sign on the lessor's behalf. If the lessor is a business entity, such as a corporation, an officer of the corporation with signing authority must sign the document. An individual with signing authority can be a director, officer, or key employee.

What is the duration of a Short-Term Lease Agreement?

The duration of a short-term lease is usually a couple weeks to a month or two. For example, renting a cabin during the summer holidays for a week would constitute a short-term lease. The duration of the lease should not exceed several months because it is not a tenancy, it is a short-term rental. Unlike a guest, a tenant has specific tenancy rights by law.

What has to be done once the Short-Term Lease Agreement is ready?

Once the document is ready, the parties must sign it. The lessor must keep the signed document in their records and provide a copy to the guest. The guest can then attend the property on the check-in date. The guest should also ensure that the property is maintained and complies with the necessary terms of the agreement regarding smoking, trash, and hosting parties.

Which laws are applicable to a Short-Term Lease Agreement?

Provincial and territorial laws will cover general contract principles, but also the specifics of lease agreements between two parties.

Short-Term Lease Agreements are also subject to municipal laws, including municipal and planning statutes, and some municipalities prohibit or restrict short-term rentals. Before using this document, it is preferable that the lessor verifies with the municipality in which the rental property is located that short-term rentals are allowed.

In a short-term lease agreement, typical provincial or territorial laws regarding Residential Tenancies don't apply. And the guest to the agreement is therefore not considered a tenant with exercisable tenant rights.

All provinces have a municipal act granting municipalities specific zoning and regulatory powers. In other words, cities can adopt rules regarding short-term rentals and whether or not levies, taxes, and licenses are required. These rules and regulations established by municipalities are called bylaws. A city may have enacted a specific bylaw governing short-term rentals. It's important for a lessor to familiarize themselves with these bylaws to avoid paying fines and penalties. The following are the pieces of legislation outlining municipal powers:

• Ontario: Municipal Act, 2001, S.O. 2001, c. 25
• Alberta: Municipal Government Act, RSA 2000, c M-26
• British Columbia: Municipalities Enabling and Validating Act, RSBC 1960, c 261
• Manitoba: Municipal Act, CCSM c M225
• Saskatchewan: The Municipalities Act, SS 2005, c M-36.1
• New Brunswick: Municipalities Act, SNB 1966(1), c 20
• Nova Scotia: Municipal Government Act, SNS 1998, c 18
• Newfoundland and Labrador: Municipalities Act, 1999, SNL 1999, c M-24
• Prince Edward Island: Municipalities Act, 1999, SNL 1999, c M-24
• Yukon: Municipal Act, RSY 2002, c 154
• Nunavut: Cities, Towns and Villages Act, RSNWT (Nu) 1988, c C-8
• Northwest Territories: Cities, Towns and Villages Act, SNWT 2003, c 22, Sch B
• Quebec: Cities and Towns Act, CQLR c C-19

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