Untangling the Process of Transferring Existing Reservations

Given everything Florida has to offer, it is no surprise that we are currently midst of a great migration to the Sunshine State. People from all over flock to take in our beaches and amusement parks and drink in our sunshine. It should not be a shock to learn that we are also experiencing an uptick in investment purchases with these families moving down here. Can you blame them? Technology now enables both property owners and potential renters to complete a booking from the palm of their hand through popular apps such as Airbnb and VRBO. While these platforms can be valuable tools for vacationers and investors alike, properly transferring existing reservations can make a difference during a real estate transaction.

What is so different between these online platforms and formal agreements?

Traditional rental agreements and leases are often explicitly stated and tangible documents. These agreements can be transferred from Seller to Buyer through an assignment, a simple paper effectively allowing the Buyer to step into the Seller’s shoes and become the new landlord. The beauty of Airbnb and VRBO is that the renter books entirely online. While this makes it easier for your client to secure renters, it complicates the process of transferring existing reservations.

So how is the transfer process completed? 

All rental agreements on these platforms link to the user’s profile, whether the host or the renter. Currently, no method allows selling hosts to assign their agreement to the new Buyer. To complete the process, the Seller must alert the renter that ownership in the property is changing and that they will need to re-book under the new owner’s profile.

What is the agent’s role in this? 

Talk to your clients. If you are representing an investor, make sure you discuss with the listing agent if there are any future rentals booked through these sites. Carefully craft language to add to the Contract requiring the parties to use diligent effort to effectuate these bookings’ transfer. Additionally, it may be wise to include language requiring the Seller to provide the existing photographs of the property used on the websites themselves for ease of setup and continued rental success. Utilization of the new “Seasonal and Vacation Rental” Rider will also enable the Seller to continue to market the property, ensuring the Buyer is maximizing earning potential.

Is there another method for transferring bookings?

Unfortunately, when the Seller does not transfer online bookings this way, they can lead to severe issues. In some instances, Sellers willingly surrender their passwords to their profile, leading to a personal and banking information leak. In others, security deposits are deposited with the Seller, leaving the Buyer to foot the bill.

As you can see, while these platforms offer individuals ease of booking, transferring future rentals is a little more involved. Therefore, it is imperative that you speak to your clients and advise them accordingly if existing agreements are in place. Lastly, please reach out to your local real estate attorney if you have any questions regarding this topic or language to assist with transferring bookings online.

Sincerely,

Jacob Van Duren, Esq. jvanduren@berlinpatten.com

Jacob Van Duren primarily practices in the areas of residential real property transactions, including purchaser and seller representation in connection with residential real estate transactions.

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