Andrea Bayer

Welcome to this episode of the Vacation Rental Success Podcast. This episode is brought to you by the Kind Sponsorship from OwnerRez, providing a powerful and flexible system for managing vacation rental properties. OwnerRez provides booking and maintenance management, payment scheduling and collection, as well as insightful reporting. OwnerRez will provide you with a long-term booking foundation that is scalable for your vacation rental business while fully managing your channel listings, but still focusing on your brand, your website, and your way of doing things. Listen into the mid-episode break where you will hear more about this internationally recognized leader in vacation rental software. For more information about OwnerRez, click the link in the description of this episode on your smart device. Let's get started. Here is your host, Heather Bayer.

Heather Bayer

Today I am pleased to have with me Keith Brady, who is the founder of Florida Vacation Rental Law. He's a very special guest, he's an expert in vacation rental law and he's got a wealth of knowledge to share with us.

Heather Bayer

This is the Vacation Rental Success Podcast, keeping you up-to-date with news, views, information, and resources on this rapidly changing short-term rental business. I'm your host, Heather Bayer, and with 25 years of experience in this industry, I'm making sure you know what's hot, what's not, what's new, and what will help make your business a success.

Heather Bayer

Well, hello, and welcome to another episode of the Vacation Rental Success Podcast. This is your host, Heather Bayer, and as ever, I am super delighted to be back with you once again.  I'm still in Gulf Shores, Alabama, but quite honestly the clock is now ticking down to having to pack-up and head back to Ontario. I'm actually quite looking forward to getting back to my own studio at home, which is something we are going to be spending some time on when we get back and making it more of a studio. So if you watch the videos, no longer will you see me with the sink in the background and occasionally a microwave.

Heather Bayer

We're actually creating a purpose-built studio now and I'm super excited about that. So, of course, when that appears in the videos, I will let you know. We are going to be posting all the podcast videos onto YouTube over the next couple of months, once we've finished doing all the transcriptions and getting some editing done. So if you prefer to watch me and watch our guests talk to each other, then you will be able to do so on YouTube. We'll also be able to pull out some snippets from some of the best of the podcasts and the best of the videos and share those with you. So there's a lot to come over the next few months. We're super excited about it, lots of things happening. So yes, I'm quite looking forward to heading home again. But here we are today and we have a very special guest who's an expert on vacation rental law. Don't sign off now. Don't switch off. This is not going to be a boring episode. This is something that we're going to have some fun with. We're going to bring you the things that you really need to know about the legal side of this business.

Heather Bayer

I've invited Keith Brady from Florida Vacation Rental Law to join me to discuss all things related to the legal side of short-term rentals, and that includes rental agreements and owner contracts. And as a specialist in vacation rental law, Keith has worked with numerous property owners and managers, helping them navigate the legal landscape of the industry and ensuring that they're operating within the law. And he's going to be sharing a lot of this advice with you today. So if you're a short-term rental manager or owner, you know that the legal side of things can be complex and confusing, which is why we're so thrilled to have Keith on the show today to share his expertise and insights with us. So sit back, relax, get ready to learn from one of the best in the business. It's time to dive into the world of vacation rental law with Keith Brady.

Heather Bayer

So I am delighted to have with me today Keith Brady from Florida Vacation Rental Law. I heard about Keith quite a while ago, actually, because his name comes up over and over again on Facebook groups where people are saying, what do I do about a rental agreement, or a management contract for owners, or liability or compliance?  And somebody will pop up and say, Keith Brady is the guy that you need to talk to. So I thought we must have Keith on the show. And here he is. Welcome, Keith. Thank you so much for joining us.

Keith Brady

Thank you for having me.

Heather Bayer

Well, it's an absolute pleasure. So obviously, Florida Vacation Rental Law, you're in Florida; whereabouts?

Keith Brady

Well, I live in St. Pete and I practice statewide.

Heather Bayer

Okay. And that's something we're going to be talking about. And I think maybe as a caveat at the very beginning here, that whatever we're talking about is really in general law terms rather than specifics, because if you as our listeners have got any legal issues or you're writing contracts or agreements, then it's really important to go to somebody, a lawyer in your own state. Do you agree?

Keith Brady

I do, and I'm prepared to provide information that is not Florida specific to better inform the listeners.

Heather Bayer

Excellent. So you're a specialist in vacation rental law, and with everybody that comes on the show, I always ask them, what got you into this crazy business? So what made you decide to go into the whole business of short-term rentals or vacation rentals?

Keith Brady

Well, I have a friend, a colleague that I knew from outside of work, and he came to me one day about 10 or 15 years ago and said, can you write a rental agreement and a management agreement for a vacation rental company of mine? And I said, absolutely. And then I went to work to figure out how. And so he was my first client, and it was serendipitous. The next thing you know, he told a friend about it, and they told a friend. And about seven years ago, I made a decision that I will practice strictly in vacation rental, because there was such a need.

Heather Bayer

Oh, there certainly is. And I think a lot of people go into this business without really thinking about the legal side of it. And then it's only when it comes back to bite them that they realize that these are some of the things that should be ticked off the checklist at the absolute outset. So we're going to be going into some of these things. You've mentioned rental agreements. We're going to talk about those. We're going to talk about management contracts with owners, what people need to be aware of when they're publishing online listings and things like compliance, and some of those things that people ask on these Facebook groups about having cameras outside and is it legal and can you record? So we're going to be talking about a few of these things. So do not go away. This is something that everybody needs to listen to. And I know Keith is going to come up with some really interesting and useful information for you.

Heather Bayer

So let's kick off Keith then. Why do we need to protect ourselves as owners, managers, operators?

Keith Brady

Well, unfortunately, it's the era we live in, the era of the demanding guest and the demanding owner. To put it into context, I'll quote the great cinematic classic The Incredibles, where when Mr. Incredible saves somebody jumping from a building and committing suicide, he gets sued for ruining his death. And that's my world. I wanted to make a chart listing down the left side of what a guest's complaint is, and on the right side, what they demand in exchange. And I said, there's no need for a chart. They always demand the same thing. There was one dead bug. Therefore I should be able to stay the week and not pay a free vacation. So the whole chart read, warm refrigerator = free vacation, cold pool = free vacation. It's heartbreaking because people treat us so unfairly.

Heather Bayer

I know this. I've been in this business since the last century; I love saying that. And I remember when it was all so different. People put up with….let's say they were tolerant. They were tolerant of things going wrong. And you just mentioned a fridge breaking down. The fridge is too warm. Usually the fridge is too warm because somebody's put too much stuff in it; right? And they've actually instigated it. But in the days gone past, you could say to them, look, this is what you have to do. You've got to defrost it and take everything out and let it start all over again. Now, you're absolutely right, the moment the refrigerator doesn't cool down, they want a free week. So we're going to be talking about how owners can protect themselves. And I think probably it all starts with the rental agreement.

Heather Bayer

Now, I know from being a property manager for 20 years that we always had a solid rental agreement in place because we did almost 100% direct bookings. We dealt directly with the guests. There were no third-parties, no Airbnb or Vrbo. Now, of course, most of it's online. And I think people forget that it's still just as important to have something in place that tells guests what their responsibilities are as well as tells them what the owner's responsibilities are.  Can you just talk about the importance of having a rental agreement?

Keith Brady

Yes, and if I may Heather, I'd like to say there's a line of defense before the rental agreement, and that's to decline to do business with about 2% of the people you meet. And the reason people don't do that is because they have the wrong standard. They say, “Well, I didn't have any proof they were bad”, or “The customer is always right”. But if you Google ‘Harvard Business Journal Hunches', you can read a lovely ten-page article, or you can just go with what I say. Here's what they took ten pages to say – I think the writers were paid by the hour! They say that if you go with your hunches, you can eliminate as much as half of your liability.

Keith Brady

Now, I did a casual study with my clients, and I say – all the times you had a charge back or another problem, what percentage of the time did you say, I knew it, I knew it with this guy? And I asked somebody yesterday, and they gave the most common answer 100% of the time.  So now let's apply what we learned. When you've got a hunch about somebody, they're asking odd little questions, they just seem suspicious or something you can't put your finger on, decline to do business with them. And I can't prove it, it's just a wild estimate, but I bet you can get rid of half of your trouble.  Now we'll look at the rental agreement to address the other half.

Heather Bayer

Yeah, I'll just add to that, as a long-term property manager I agree 100% with that. And this is what we used to tell our staff. If you get that ‘gut feeling' – you called it a hunch we call it the gut. You get that gut feeling that says something's not quite right, 100% of the time, go with the gut. It's a little bit difficult with instant booking, of course; right? And we'll come on to that.

Heather Bayer

But let's go into the rental agreement. Now, what's the most important things to have covered?

Keith Brady

The most important thing is an attorney's fee clause. And the reason why is when the amount in dispute is $500 or $5,000 or arguably more, it's impractical to use a lawsuit as leverage in negotiations. Notice I didn't say it's impractical to win a lawsuit. That's never a good idea. I mean, rarely, unless there's $100,000. So we really have to learn how to negotiate settlements long before it gets to that point. And it's very important to be able to tell a guest, or an owner, that I know that I would only win $500 or $2,000, but please see the attached highlighted agreement. You'll also have to pay for both your attorney and mine.

Keith Brady

Now, if you allow me a little leeway, Heather, I'll digress just a little further with that. You actually can't tell a guest that you're going to win a lawsuit or steam is going to come out of their ears with a whistling sound.  You have to tell them that my attorney said I could win a lawsuit and this would happen, but I didn't reply to him, or her, because I just want to resolve this amicably. And now you get all the benefit of the threat, but none of the detriment. You get none of the blowback for threatening, but you get the benefit of the threat that I have an attorney and he said he could win. It's both more believable when you say he can win and it's also less threatening. And it's not a moral issue to be nice, it's a strategic issue. And strategy-wise, when you let them know you've dismissed that attorney's offer to represent you, and you just want to resolve it amicably, you can get a good settlement because you have that attorney's fee [clause]. All you have to do is compromise and meet in the middle.

Heather Bayer

Generally, when you talk about an attorney's fee clause, what does that look like?

Keith Brady

Well, it's something you can do without an attorney. You can Google and look at sample attorney's fee clauses. There's no magic words. The wording is not that important. But it basically says if the two parties to this agreement wind up in a legal action or a lawsuit or litigation, again, the exact words don't count. But if the two parties to this agreement wind up in a legal action, it's agreed that the losing party has to pay the winning – or we usually say prevailing – the prevailing party's reasonable attorney's fees.

Heather Bayer

Okay, so you can Google. You just have to Google that, and you're going to come up with some text. I often suggest to people who are asking what should I put in a rental agreement? And I'll make some suggestions and just say, just draft up your own, based on lots of other people's and whatever you read online, and then take it to your attorney and get them to check it over.

Keith Brady

Excellent. Yes. One of my mentors, Roger Schaefer, always said, “Creativity is overrated, that plagiarism is under appreciated.” But it's true. There's actually major companies like Walgreens, a big chain of pharmacies/ drugstores, and Levi, the clothing company, and Burger King that decided they really don't do any market research or anything. Those three companies just copy what other people are doing as far as price, location and employment policies. So it's a great idea.

Heather Bayer

Yes, I'm sure you could probably go to ChatGPT now and just say, write me a rental agreement, and they're going to bring you just about every part of every rental agreement that's ever been posted online. And then once again, take it to somebody who knows what they're talking about to put it in the right context. So what else? So we have this clause on attorney's fees. What else would you recommend is listed within a rental agreement?

Keith Brady

Well, in a rental agreement, there's a couple of key things you want to cover. The first is the liability, what you traditionally think of when you think of an attorney and a good contract. So you want to have your cancellation policies spelled out very clearly. I think most would agree that would be the most common conflict or dispute.  Well, I take that back. That's a common dispute, is we want to cancel, we want our money back. And so, again, there's no magic words. Now, I can argue if I'm cornered and I'm like, wait a minute, there's some very important things you really need an attorney for, but one of them is not your business policies that if you cancel 30 days out, this is the policy. If you cancel 60 days out, this is a different policy.

Keith Brady

Now, it's good to give some explanation, because as everybody knows, showing somebody what they're bound to in the contract often can be dismissed. “But you should have a heart. You should make an exception for me.” So when you spell out, “Listen, this is our policy, and please understand….”.  If you have any concerns about cancellations, I suggest you even put links in for ‘here's where you can buy trip cancellation coverage', or ‘here's where you can buy travel insurance. And please understand, your remedy is not to come to us.'  You may even add something like, ‘we're just the agent. The money has already gone to the owners. We don't have it to refund you, so please initial here.' So it's not just having something that will help you win a lawsuit, it has to be something that helps you quash the conflict.

Keith Brady

So let's just stick with this idea of cancellations. I recommend that you have them initial a cancellation policy. And the reason why is people don't read agreements. So if we want them to read it, we'd better have that in bold or red and/or initial – all three is probably best. And I want to clarify, that doesn't mean initialing every page or initialing every paragraph. It loses its meaning. They'll just zip through it. But if you use discretion and only have one, two, three places that are bold, red, underlined, and you need to initial that, they'll actually read. So now what's happened, because you've explained, because you've had an initial, you've gone from a position where you can win a lawsuit to a position where you can avoid the conflict altogether because you've been nice, you've explained and you've made sure that they've read it all.

Keith Brady

Now, there is a bigger, more common area of conflict that I can move on to next, Heather?

Heather Bayer

Yes, go ahead.

Keith Brady

That's the disclaimers. It's the quality of the housing. And with all due respect, most people overlook this. It's a really important part of the agreement.  I'm argumentative, so I can argue it's the most important part of the agreement by the way, and I'm an attorney. I can argue against it or for it, but it's very important.

Keith Brady

So terms I like to put into a rental agreement. This house is as is. That's a legal term that a lot of us are familiar with. You see it with automobiles, you see it with house purchases. It's as is. But again, soften your tone, otherwise you've just got an agreement to wave in their face and get them mad and, oh, you're going to sue me. I'll do negative reviews. I'll go to the platform. It's not good enough to win the argument. You have to win the argument in a way that doesn't upset them. So we explain. This is a vacation [home]… You want to not be sarcastic, but to be clear, let me be sarcastic. From the great film Back to the Future where Michael J. Fox's head is knocked on, he's told Hello McFly. Hello, McFly. Just state the obvious, you know, Hello McFly, this is a vacation rental home. There's going to be some wear and tear. It's not going to look exactly like the pictures. There might be some moved furniture, some changed furnitures. There might be a need for spot cleaning, in which case we'll provide it. But you don't get a free vacation.

Keith Brady

So just walk them through that. We're working really hard here, guys, to provide great accommodations. Might not be exactly as it appears. I write a whole long list that, look, there might be a little trouble with the Internet, or with logging-in, or a couple of dead bugs, or a cold pool, or a warm fridge. The weather might be a little off. There might be construction nearby. Now, those are all ones, for what it's worth, that I literally put in my agreements. But you can use your own list. And then when somebody complains again, I keep reshaping every point into…. it's not good enough to have a good agreement, it's how do I use it? The way you use it is you email them. You don't rub their nose in it, you show them the highlighted agreement. You let them know, please see the attached agreement if you want to address this as a dispute, but if you'd rather address it as a customer service issue, I'd be glad to help you. So why is it important to have a heart, to have warmth and have all these details as to how and why we won't refund you and how and why we won't refund you for cancellations, or as we're on to now with the quality issues. And then just let them know if you want to address it as a customer service issue we will help you.  All of that is because it greatly reduces their demands. They get off of their highly aggressive demands where they think they have rights to realizing they better come at you a little nicer.

Heather Bayer

So this sort of takes me to the whole issue of online rental guidelines. So many people are putting their properties on Airbnb or Vrbo, they don't have their own rental agreement. They're relying on what they put in the rental guidelines. And all that the guest is going to do is tick a box to say I have read these and I did this myself last week. I tried to book direct with a property in England for a vacation in May, but couldn't find them. So I went through Airbnb and I ticked the box ‘I've read the terms and conditions' or ‘I've read the rental guidelines'; I had not. How do you address this?

Keith Brady

Well, first of all, nobody reads those agreements for anything. I certainly don't read agreements even at a real estate closing. It's too much. My father taught me that it's more important to review the people than to review the agreement. There's people out there that don't honor their agreement. So it's irrelevant what it says.  I want to see their reviews, I want to know who they are, as a consumer.

Keith Brady

Now, the more important perspective is as the host or the owner or the manager, there's a couple of important legal technicalities. The first is that in the United States at least, you're not allowed to use the term Terms and Conditions or it's not enforceable. The reason is terms and conditions is a legal definition of the terms and conditions of the use of the website or the rules of the website. So they feel that….the government feels that you're hiding it if you mislabel it like that. So you have to call it Rental Terms or Rental Terms and Conditions or something other than Terms and Conditions on its own. Now, the second thing is that if they click, then they've consented; so that's fine, they are legally bound to those terms. And the third thing is that in a lot of states, anything like house rules are not enforceable just because you posted it online, because they haven't clicked, they haven't signed. But if you post it in the property,  now it becomes enforceable. It's what they call a special law and it's just what it sounds like.  They made an exception to a signed contract because it's too hard for hotels to start with. So anything that you post and make people aware, they said, we're going to treat that legally as if it's a signed contract.

Heather Bayer

So can you give me an example of that? Just to wrap my head around that one.

Keith Brady

An example of what would go into good terms?

Heather Bayer

So are you saying when they get to the property, there should be written house rules.

Keith Brady

House rules posted. And despite the modern era of communications we live in, it's important to post them physically in the house, make them short and sweet, use bullet statements and not paragraphs, and no more than ten, no more than one page, put a logo, put some color, make it friendly, and people will actually read it. And again, it's not good enough to have it in a contractor terms, which they don't read, they rarely read, but here they'll read. Now you get much better compliance with what to do with the laundry, what to do with the locks, the air conditioners, the trash. It's one of the biggest corrections I have to give my clients is quit looking at me as somebody that can send demand letters and threaten people and look at me as somebody that can draft agreements and draft terms that you can do to quash these conflicts as soon as they arise. So it's a real simple question that I ask my clients. List to me what kind of problems you're having – Oh, well, it's with the trash.  When they think that they're going to tell me grandma died and they get their money back.  Okay, well then, let's address them.

Heather Bayer

That sounds like that's a good action point then, for anybody that's starting out is to just think about all the things that might come back at you, make a long list of them and then address each one.

Keith Brady

Yes. And they're pretty obvious. It doesn't take ten year's experience to figure out what they are.  We've covered the biggest ones. It's the quality of house and the cancellation policies.

Heather Bayer

Yes. Excellent. Let's move on to owner agreements. I know as a property manager of 20 years, that having an owner agreement is essential. I don't think in 20 years we ever…. perhaps in the last couple of years we did use a couple of the agreements to alleviate some issues, mostly where owners had put their properties up for sale when they had a full summer's worth of bookings in there. Previously, before this became an issue, we hadn't addressed it in our owner agreement, and therefore we could not go back to the owners and say, hey, we have used our marketing dollars, we have advertised the property, we've marketed it, we have committed to these guests. And now you have some obligation to either allow them to stay or to at least contribute to any increase or contribute to the cost of rehousing. So we did this at a very later stage, but I think that was one of the most important things that we did. But apart from that, I don't think we ever had to use an owner agreement in a dispute. But you have to have them.

Keith Brady

Yes. The termination terms are the number one source of conflict, so it's very important to spell them out.  Now, my suggested terms, now bear in mind, owners to a lesser degree sign without reading.  If they read something and want to change it, then you accommodate them. In other words, it doesn't hurt to ask if you present the agreement in a warm manner.  Please review this, let me know if there's anything that needs to be changed because this has to work for both of us. Then you're never going to lose a sale. I've asked, have you ever presented an agreement and somebody said, “Never mind”? And almost all say, no, never.

Keith Brady

I said, so bear that in mind that it doesn't hurt to ask, largely because if they don't like it, they're going to ask for edits. They're not going to walk away. By the way, I snuck in a magic word there. In this case, the exact wording does count. Don't ask them that. Let me know what you think or give me your feedback, or let me know if you want to change anything or the floodgates will open. Use that exact terminology. Let me know if there's anything that needs to be changed. We found you get much less pushback when you word it the right way.

Keith Brady

So when you terminate, you're required to honor all the existing agreements. I recommend you remove all the language about ‘we'll try to move them if we can, and if we can't, then you can do this or that'. Well, you're paid to get reservations, so if they pay you 20%, you have to move them and place them somewhere else. The new people should pay you 20% too. So going back to the issue here, the owner agreement needs to say, here's the terms. For example, it's a one year term and to terminate it, you have to give a 60-day notice.  You may vary from that. I do recommend the one year term, though.  When you terminate, you not only have to give proper notice, but you have to honor all the reservations that are in place at the time. And we even add ‘and we're going to continue to make reservations throughout that 60 days'. That's going to give you all the protection you want.

Keith Brady

Now, in most states and most countries, possibly all, so a very high percentage, a sale is subject to the existing leases too. A lot of people say, oh yes, I know that from long-term rentals, you can't tell a tenant to get out because I sold the house. The new owner has to honor that lease, and legally this is the same. So there's a really important issue here. And then I'll move on to just one other huge problem with owners. But the issue is surprise, surprise, how do we move from having the right terms to win a lawsuit to one to avoid one and quash the problem? And it's real simple since they sign it without reading it for the most part, we might as well ask very largely. So we even add a couple of buffers. Like there's a $1,000 startup fee, but it's waived. But then in the legal terms, which they never read, it says, and by the way if you breach, that $1,000 fee is reinstated.  And so we put some other things – incentives, we'll call them – I'm being a little sarcastic, but a couple of other terms.  We never really enforce them, they're just for negotiating strength.

Keith Brady

So let me cut to the quick. Dear Owner, please see the attached highlighted agreement. That's mantra. If you want to address this as a dispute, we are required by policy to send it to our attorney. But if you want to address it as a customer service issue, pick up the phone. Note that I said pick up the phone. Don't plan on being the first person in world history to resolve the conflict by messaging. So have them pick up the phone, talk to them, and then you can commit it to writing or an email. And by the way, casual unsigned email is a binding contract. So you let them know, look, the agreement says you have to wait till the anniversary date to terminate. You've got to honor all the reservations in place. I put $1,000 waived fee back in place. But how about this? And I encourage my clients to give generously, to say, listen, how about maybe I'll keep booking on the last 60 days, but just to fill in the gaps, I won't go past that last reservation, and or I will move what reservations I can.

Keith Brady

But I'll tell you right now, with Easter a few weeks out, I can't move that one. You work with them. You don't really reinstate a fee based on a legal technicality. You don't really just try to stick it to them. You work with them, but from a position of strength.  It's very important, you have to get them to agree first. If you want to address as a dispute, we go this route, and I refer it to my attorney. You can talk to him or her, but if you want to address it as a customer service issue, we'll talk.

Keith Brady

Why?  Because now they're not going to be making the same kind of demands. Now they understand that, yes, I did look at that highlighted agreement and realized I don't have these rights. So now I see them as being very nice and very cooperative, and they'll be agreeable. A little psychological note, if you tell them, admit that you have no legal rights, they won't. It's too much for the ego. But when you quietly let them do it on their own, let me know if you want to address it that way with my attorney or customer service issue with me. Now, you haven't rubbed their nose in it, so they can come to you. And it's very polite, it's very unstated that they admitted to themselves that they have no legal rights, and that's how you resolve these problems.

Heather Bayer

Yes, it's very interesting. We'd spent years refining our agreement, and it really covered just about everything. We were always happy with it until the last couple of years, 2021 in particular when the money trucks just kept appearing up people's driveways and they said, somebody made me an offer I absolutely cannot refuse. You just tell me what you need to make you go away.

Keith Brady

Right. And we're very reasonable. We have had people that they're getting a check for a half million dollars at closing, and we tell them, all you have to do is pay me my commissions I would have earned on the canceled bookings, plus some commissions I would have earned on future bookings. $15,000 would be a common number for people that are saying, Woohoo, I'm rich!. They don't care about 15-grand, especially when mom just died and they're selling the house and moving from the lower middle class to the upper middle class. They don't care about 15-grand.

Heather Bayer

Yes, we ended up with, I think we said in our our management agreement that, if this happens, then you are liable to all commission plus additional costs, because we had to relocate people, so you will pay those additional costs. And that wasn't just the monetary costs between the price of one property and the price of the other, but also include the administration costs and something for our poor guys in the office who had to deal with upset guests. That was worth money, too.

Keith Brady

Yes, we have had a lot, meaning certainly this week included, of platform penalties, 25% minimum, but because we couldn't find anything, it's double. I've had double this week and even triple. That's why we no longer put in the agreements that you're merely responsible for the fees, the commissions, because we say that you're responsible to honor the bookings because it gives us better negotiating strength.  Then we'll see what we can move and accommodate them as a customer service issue.

Keith Brady

The other thing that really bothers me is a lot of owners, to try to build their negotiating strength, will ask to see all, of a sudden, three years worth of invoices and records, and they don't remember this or authorizing that. So we put in our agreement that if you ever want us to do any accounting for you – administrative work – it's $75 an hour. So that way, when they want to say “You don't want to let me out of the agreement, you say I'd be breaching.” Well, I think you are. And my clients call me and say, what should I do? Do I have to give them these records? I say, if you don't, you look so suspicious. So go do your 12-hours worth of work to dig up every invoice and every record and make sure you have in your agreement that that's billed at a fair accounting rate of, I suggest, $75/hour.

Heather Bayer

That's an excellent point. That's one I hadn't heard of. And thank you for that one. I can't believe how quickly time is moving on. And I've got a few more questions for you before we have to wrap this up.

Keith Brady

Heather, despite the time, please allow me to add a really quick note on owners' agreements. When you say that we're not responsible for anything that's not enforceable, you actually have to do a good job.  You can't contract away all your liability. The only thing you can contract away is your attorney's fees that they have to indemnify you for losses that are their fault, has to be their fault and then it can go….. actually, I misspoke… then it can go beyond attorney's fees.  You can't have undisclosed fees.  When people say, well this cleaning fee, or that will be ‘defined later', or it doesn't work and people have undisclosed fees, you have to put in your agreement we're marking everything up 20%.  You can't just mark it up and not disclose it. I'm done.

Heather Bayer

Okay, now that once again is super useful information. So Ive just got a couple of questions, because these have come from owners and managers.

Keith Brady

Okay.

Heather Bayer

So one of them is about security and protection of properties. People are installing technology to monitor noise, to monitor occupancy. They've got video camera surveillance. We used to speak to owners who wanted to put a camera on the back deck because they wanted to surveil people using the hot tub in case they damaged it. I had one owner who wanted a camera down by his waterfront because he didn't want an accident to happen with somebody launching one of their canoes or kayaks and him to be blamed. So how does this all stand from a legal perspective, this whole surveillance and monitoring?

Keith Brady

It's a high risk area for owners and guests. The legal term is video voyeurism. It's the same law that stops you from having a peephole in a women's dressing room. As awkward as it may be to hear, a lot of people disrobe and engage in some extremely private acts in a vacation home, even when they don't at home.  They're in a wild, drinking party, you only live once mindset. So you can't be filming people. The legal term is, you can't film people whenever there's a reasonable expectation of privacy. So what that means is cameras are actually okay at a dock as long as you, A) disclose it in the rental agreement,  and B) have a sign at the dock. A lot of my clients will use a little humor like “Smile Your on Candid Camera” or just something with a little humor, but you want to let them know and you want to do it two places. But you cannot have cameras in the pool or Jacuzzi area or even on the back Lanai, despite the encouragement by some insurance companies. They want you to have it, but it can be a felony, meaning that you can literally go to prison for over a year. Now, if you accidentally film and view an underage topless girl, the penalty for that is over one year in prison.  So you cannot mess around with this law. You want to make sure you have a Ring™ doorbell or whatever brand you prefer filming the front door outwards.  And you can have the dock area and the side yards where the pool and AC equipment is, but not anywhere where there's an expectation of privacy.

Keith Brady

Now let's add to that the decibel meters. Decibel meters are allowed. They need to be disclosed in the rental agreement, and they need to be disclosed with the sign in the house, and you can't record conversation.   NoiseAware™ is one of the brands, and I'm not plugging anybody guys, just whatever your favorite brand is. So as long as you disclose it, you can record the decibel levels only and not the actual recording. And then one other thing, and this is brand new, is that there's been some case law that when you're a licensed professional, then you can monitor the Ring™ doorbell or the NoiseAware™ software or your favorite brand, but the owner can't; it has to be done by the professional.

Heather Bayer

Okay, what if it's the owner who's renting independently?

Keith Brady

Then he can.

Heather Bayer

He can, yes.

Keith Brady

But once you hire a professional, you have to hand that portion of management to them.

Heather Bayer

Okay, that makes a lot of sense. Okay, I've got another question for you. We, all owners, managers, hosts, whatever, deal with issues and complaints. And there is always the question of if I don't handle it well or if I don't give them something, they're going to chargeback. What can people do to protect themselves from a chargeback?

Keith Brady

Not give a bully what they want or your risk of chargeback increases. You always start by giving them a highlighted rental agreement, letting them know you [they] have no such rights. If you want to address it as a dispute, we refer it to our attorney. You'd rather address it as a customer service issue…. so it's a mantra. You can hear the same thing over and over. The last thing you want to happen is for them to go to the platforms, because the platforms are going to be favorable to the guests. That's the understatement of the year right there. So what you really want to do is you want to have a strong enough contract that you can always meet them halfway to settle. So the house is as is. Now let's talk. So three things you can put in your agreement that you can show them in highlighting is you waive your right to chargeback and agree instead to arbitration or mediation. Number two, you agree to waive your rights to complain to the platform. And number three, you agree to waive your rights to negative social media and bad reviews.

Keith Brady

Now, by the way, that's not legally enforceable. The third one maybe, but the first two, no. The platform doesn't care. They're going to listen to the complaint and so will the credit card company. So why do we put it in if it's not enforceable? Because I'm not their attorney. It cuts it down. It's not a cure-all. So the first thing you want to do is understand that if you put these waivers in there, that it's going to cut down on the complaints. The second thing is very obvious.  It's to do a good job.  Half of the complaints I see are legitimate. I saw ‘Peeling Paint' house the other day for $4,000 a week, and it was horrible. And also, they didn't reveal that a whole portion of the house was locked off for the owners' use. So do a good job and resolve the issue.

Keith Brady

Now, I said you can't give a bully money, but you can compensate them, but you have to get them to sign a little half page release that, if I give you your free night or your free pool heat or a discount on your next stay, sign here. No chargebacks, number 1; negative reviews, 2; platform complaints, 3; lawsuits, 4.  Those 4, sign here and then you'll get that. If they don't sign it, they don't get it. That will reduce your risk. But if you give them something without the signed release, it will actually increase the risk because they're going to want to come back for more. Then if you run into a chargeback and you have to dispute with the credit card company, then of course, that's a story for another day that you want to build good evidence, you want to have inspection reports, contract terms to show them to defend yourself.

Heather Bayer

That is all such fantastic information, Keith. And I'm really thinking that I've got more questions here, but we are running out of time. So I think with your agreement, maybe we do a ‘Part 2' and we come back with some specific questions. Would you do that for us?

Keith Brady

Oh, I'd love to.

Heather Bayer

Okay. This has been great, and I think what you shared so far is going to be so useful for everybody that is listening, because there are some other things that we haven't really dealt with. We were going to talk about compliance. There's things about service animals that I think we should cover. ADA [Americans with Disabilities Act] compliance is particularly important, but that's perhaps for another day. And I'm pretty sure that those people who are listening to this are going to say, yes, yes, let's get Keith back and we'll do this again.

Heather Bayer

Tell us a bit about what you do for owners and managers. If they came to Keith Brady at Florida Vacation Rental law, what can they expect from you?

Keith Brady

Well, they can expect that if their life is a train wreck and they have a lot of legal problems that I'm going to refer them to my son and I'm going to focus in on people that want to get it right and avoid the problems. So the main three things we do are compliance training, rental agreement training, and management agreement training. It's more than the agreement, it's the training on how to use the agreement. Exactly what we covered in today's podcast.

Heather Bayer

That's something that people don't think about. I've got a rental agreement, I've got a management agreement and that's it. But how you actually use them is just vital and I haven't really considered that. So I'm glad you've brought that up. So Keith's information will be in the show notes if you want to get in touch with him.  You'll find him at some of the Florida Vacation Rental events. I know you can go to vacationrentalformula.com and see a list of the events and I'm sure that does include the next and I can't remember what….. Dennis Hanks is going to love me if I get this wrong. It's now Florida….. I don't know what it is…..

Keith Brady

Florida Alliance of Vacation Rentals.

Heather Bayer

…..Florida Alliance, FAVR, Florida Alliance of Vacation Rentals. And I'll put a link to that in the Show Notes as well.

Heather Bayer

Keith, you've been an absolutely fantastic guest. Thank you so much for joining me, clearing up a lot that's been on my mind and I know the minds of many of our listeners, so we've really appreciated you sharing all this.

Keith Brady

Thank you, Heather.

Heather Bayer

Well, thank you so much, Keith Brady. I think there were quite a few mic-drop moments in that. Don't forget that every one of these podcasts has a transcription, so it's fully transcribed. It's on the Show Notes – I'm not sure I've even mentioned this before – but yes, if you are out and about and you're listening to this and you hear something and, if you're like me, it's like, oh yeah, I've got to make a note of this and I'll talk to Siri about it, and then I forget. And then when I get home, I haven't made a note and it's gone out of my head. But because we now have a transcript of every episode, you can go to the Show Notes and you can read through and find the bit that you found really interesting.

Heather Bayer

As you can tell, my voice is beginning to crack up now, so I'm going to finish this and get this one edited now to you. I will, of course, be with you again next week. I've got some really great interviews coming up. I'm going to be talking to Jodi Bourne about Instagram. I'm talking to Bart Sobies in Australia about how we can use ChatGPT.  I'm talking to Caleb Hannon, who is a property manager and founder of the website State Lake Norman. So we're going to learn about another successful property manager and much, much more over the coming weeks. And I want to hear from you if you really enjoyed this and if you've got a question for Keith next time we have him on, because it's going to be a question and answer session and I want the questions from you to ask of him. So I'll leave that with you. Thank you once again for joining me. Always a pleasure. See you again next week.

Andrea Bayer

This episode was brought to you by OwnerRez. For more information about this internationally recognized leader in Vacation Rental software, click the link in the description of this episode on your smart device, or head over to www.vacationrentalformula.com/ownerrez to find out more.

Heather Bayer

It's been a pleasure as ever being with you. If there's anything you'd like to comment on, then join the conversation on the Show Notes for the episode at www.vacationrentalformula.com. We'd love to hear from you and I look forward to being with you again next week.