Double dipping on vacation rentals?

Question

I have both single family and vacation rentals. In my state (not sure if it applies to others), landlords are not allowed to double-dip. Example: Say the tenant's lease goes through the end of the month and they pay for that month then vacate on the 5th. I fill it on the 10th, so I would then return that tenant's pro-rated rent from the 10th to the end of that month. This has been my practice.

I have also applied that to my vacation rentals, specifically in regard to cancellations. My cancellation policy is that if a guest cancels two months+ ahead of the booking, s/he gets 100% back. If s/he cancels 30 days+ ahead of the booking, s/he gets 50% back, but nothing back if s/he cancels less than 30 days before the booking. However, if the property gets re-booked, I always refund the guest for those days. I don't plan on changing this practice, because I think it's fair.

I was following a thread in a vacation rental forum recently where the owners said they typically did not refund any amount, no matter if they re-booked the same dates or not. This sounds like double-dipping to me, but I couldn't find an answer as to whether the prohibition on double-dipping applies to vacation rentals or not.

Again, I'm not changing my policy, but I am curious to know if it is allowed, since so many other owners appear to do business this way.

TIA!

Paul Sandhu · Answer

There is a motel in my town that only rents to Union Pacific railroad employees.  They charge them for a day, the guy is only in there for about 9-10 hours to sleep and take a shower, then goes back to work.  The motel rents out the room again and gets a full days of rent.  His occupancy is over 100% because of this.

Joe Splitrock · Answer

Different rules apply to short term rentals (which are basically hotels) and long term rentals. I can't comment as to the legality in your state, but there are many differences. STR occupants are not tenants and do not have tenant rights if the stay is within a certain period of time. In most cities and states, STR are taxed under hospitality tax laws. You can enforce occupancy limits and charge by number of people - even if they are family members. These are just some differences from long term rentals. Do what you feel is right, but don't assume you can't legally keep cancellation fees. Cancellation fees are not rent.