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I don't like to keep security deposits if the guests cancel, but I feel I have the right to do so if I cannot rent out their dates. What if they cancel within a week or 2 of their dates and paid you in full? Do you keep their entire payment if you can't rent out their dates or just keep the security deposit?
Hi blue neptune,
As you wait to hear from other Community members, this discussion about advance payments/cancellations may be of some interest.
All the best,
I clearly state in my policy and in my contract that I will refund the rental up to 30 days prior to check-in. After that there are no refunds for any reason; however, I offer them two types of travel insurance. The standard type policy lets them cancel for certain specified reasons such as illness, death, etc. I also offer a cancel for any reason policy. This policy returns the m 75% (versus 100%) if they cancel for any reason (not a covered reason) up to 48 hours prior to check in. They gt back a 100% if it is a covered reason. I strongly encourage them to purchase the insurance since it also covers them for hurricanes or major storms. My policy clearly states that even in the event of a forced evactuation there are no refunds so a policy is their best protection. So far this has worked well and I have not experienced any problems.
If you make it too easy, people will often cancel becasue one of the friends decides not to go, etc. If you make it cost, the friend will either decide to go or be faced with paying their share anyway so it discourages cancellations.
My guests pay a $300 reservation deposit to secure their dates. It is not refundable for any reason. 30 days prior to occupancy, I require full payment. This payment is only refundable if the property can be rebooked for the same dates. This policy keeps out people who are "looky loos"--and cannot make up their minds. Their are hotels for that kind of traveler. This is our second home, and we are busy--so as a result, I have very few cancellations.
I am thinking I need to revise my non-refundable deposit policy and I like what you have written, Nancy. If I am reading correctly, even if you rebook the time covered by the cancelled reservation, you do not refund the $300.00. - Is this correct? My recent cancellation, which is causing my reassessment, was for medical reasons. At that point, they had only paid the deposit, which is clearly non-refundable in my contract. However, my deposits are 25% of the total and I am feeling guilty for keeping their deposit because I was able to rebook most of the time they requested.
We require 1/2 of the rent before we make the booking. The second half is due 60 days before the rental begins. And, we have a no refund policy. However, for a fee of $300 we will attempt to re-rent a person's dates for them. This has only happened 3-4 times in 5 years. Each time we have been able to re-rent the dates. One time a fellow was physically injured a week before his stay. In that case, we let him transfer his weekend to a different, similarly priced date a month later.
Our renters know our policy up front. It keeps out the folks who want to reserve dates, just in case. As some one else said, hotels service that market.
We do this because most of our summer rentals are booked between December and March. If someone would book and cancel we could very well miss our prime booking season. Also, the rental income is earned at the point the booking is made. Therefore, it is ours to spend at that time. And, we don't have to keep such a large reserve to cover cancellations.
Thank you for sharing your policy. If I am reading what you say correctly, you are essentially charging a $300 cancellation fee if you can rebook for the reservation. If you cannot rebook, the entire reservation payment is forfeited. - Is that correct? Have you ever found that people are hesitant to pay the full amount 60 days before arrival?
Hi Blue Neptune,
Our policy is that we will refund the fees paid IF AND ONLY IF the house can be re-booked. If re-booked at a lower rate, then we only refund the amount received from the new tenant (and keep the difference). If we cannot re-book, then no refund at all.
Fortunately, in 4 years, I have only had 1 cancellation and we re-booked the house at the standard rate, so they got their money back.
Like laughscott, our policy states that a we will refund only if the property can be re-booked, and if it is re-booked at a lower rate, the refund will be for the amount received. If this is stated in plain language and highlighted in the lease, it should not be a problem. I obtain half of the rent upon booking, and the balance 30 days prior to occupancy, although I have thought of changing the balance to 60 days prior, to give us a better chance of re booking in case there is a cancellation. Depending on where your rental is should determine your balance date. We are in New Jersey and our high season is only about 11 or 12 weeks long, with about 7 mid season weeks. The rest of the year is low season so we really depend on the high and mid season rentals.
Our lease agreement states clearly that the cancelling renter will receive a full refund MINUS a $100 processing fee IF the house is rerented for the full amount of the rent posted on the listing. If the house is not rerented, there will be no refund. We require full payment 60 days prior to arrival.
We have only kept 3 deposits in the 15+ years we've been renting. We used to offer a full refund if we received the cancellation within 30 days. However, our rental is in Hawaii and it is almost impossible to re-rent when we get short-notice cancellations. So we recently changed our policy to a full refund if > 60 days, their deposit if > 30 days, and nothing except at our discretion for anything else (which includes shortened stays).
What really drove us to change our policy were people who rented from us during a popular time (Ironman), showed up, told us they loved the place, then the next day they told us they had met some local people who lived here and wanted to stay with them instead. We warned them they would not get a refund, but they moved out the 2nd day anyway. Then all of a sudden the place they "loved" had bugs, loud noises, too close neighbors, etc. so they wanted all their money back. We ended up refunding only the amount over and above our minimum stay just to settle the issue.
For reasonable people, we take into consideration the reason for the cancellation (in our most recent case, they told us their daughter broke her femur). They offered a certification from a doctor if we wanted it. We could not rerent the time, but did give them their money back.
If we can rerent the time (usually only possible if they cancel fairly early), then we refund what we collect minus expenses such as cleaning & taxes. We aren't trying to make a profit on their cancellation, just get by fairly.
We do think that the "refunds only at our discretion" does tend to help keep people honest, though. Of course anyone can say a family member died or got sick or they lost their job (the most common reasons for cancellations), But sometimes you have to err on the side of compassion.
My policy is more sringent and it has never been a problem. I always advise people to purchase travel insurance to protect themselves against some inadvertent problem (job loss, injury, etc.). It is up to them to cover their risks, especially since they are in the best position to know whether an unexpected situation might arise. I only offer a refund if I am able to rerent their stay. Otherwise no refunds.
my cancellation policy is no refund 90 days in as i have a house thats tougher to rent. but i only have 1/2 the total rental until the 2nd rental payment is due 30 days in.out of 120 remtals in 3 plus yrs i've only had one cancel and it was my very first rental that was 3 days before checkin. he had paid in full and i gave hime back his deposit and $1/4 of his rent even though i couldn't re rent. i was soft then.
There was another post similar to this one on this forum, so check around for other answers.
I have a very strict contract, but if someone has an emergency I do everything I can to try to re-rent their time-frame. Since I started renting in January 2010, I think I have only had two and in both cases I was able to re-rent and give them their money back. In addition to that I had a corporate rental for 9 months that ended 3 months earlier than they thought. While they expected nothing in return, I was able to give them all three months back because it rented quickly because it was March-June. I know there is travelers insurance, I know that they "agree" to our terms, BUT...I always try to put myself in the others persons shoes and think how I would feel, not only cancelling my vacation plans, but also being out quite a bit of money too.
However, if you can' re-rent during their time-frame, then I guess you just have to do what you think is right. In other words, was it a real emergency? Or, are did they just find another place they liked better at the last minute. Then go from there. That's just my 2 cents.