Holiday rental accommodation
Some real estate agents manage holiday rental accommodation where people seek short stays of up to 90 days.
It is important to remember that holiday accommodation payments – including deposits and security deposits - are regarded as trust money and must be handled in accordance with the Property, Stock and Business Agents Act 2002.
By law, the trust money must remain in the trust account unless the person who paid the money has provided clear instructions to the contrary or the contract has ended.
In other words, a real estate agent must receive clear written instructions from the person who paid the money before the money can be paid to the owner of the property or into the agent’s general account for the agent’s commission. These instructions should be included in the agreement when the guest books the accommodation.
Agents must ensure that:
- there is a written agency agreement to ensure proper arrangements are in place for the payment of commission and costs (go to the Agency agreements page for more information)
- the owner of the property is made fully aware of the requirements and has provided clear instructions about the management of the property in the agency agreement
- prospective guests are told if they may have to pay a deposit and about any refund arrangements and procedures
- the guest provides clear unambiguous instructions in a written agreement about how any payments made by them are distributed
- any money received is paid into the agent’s trust account as soon as practicable
- a trust account receipt is issued to the guest for any money received
- the money is only paid out of the trust account if the guest has given clear written instructions or the accommodation has ended and the contract completed.
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