What happens when someone sells your vacation home?
A few days before flying to Bali, Indonesia, I received an unexpected email from Airbnb: My host had sold my vacation home.
“We’re reaching out with the unfortunate news that your reservation was canceled,” it said. “Your refund is on its way.”
But wait – I didn’t want my money back. I needed a place to stay while I was in Indonesia. Airbnb assured me I had nothing to worry about. It would find a new rental and cover my extra expenses. But, as always, some restrictions applied.
SALES CANCELLATIONS ARE ON THE RISE
Selling a vacation rental out from under a guest is becoming a big problem, say insiders. There are no statistics on the number of vacation rentals with active reservations that are currently for sale. But Justin Gordon, who runs the rental price comparison site HiChee, says more hosts are putting their rentals on platforms like Airbnb and Vrbo while they wait to sell their properties. He’s seen the disruption it causes guests who are about to leave for vacation.
“I felt so sorry for the guests,” he says.
Did I mention the Indonesia rental? That wasn’t my first cancellation. I rented a condo in Oahu a few years ago through Vrbo. A week before I checked in, I got an email saying my stay had been canceled because the property was sold.
“Many homeowners are investors, buying properties low and selling high or holding them for a set number of years as a part of their financial strategy,” explains Matthew Deal, managing director of Element Vacation Homes, a central Florida vacation rental company.
A cancellation can have consequences for the seller. For example, if you list your home on Vrbo, you might have to pay the platform a cancellation fee, which gets higher as your arrival day approaches.
“In addition to financial penalties, repeat offenders may see limited search visibility on the Vrbo app and site, temporary suspension, or revocation of their Premier Host status,” says spokeswoman Nola Lu.
Airbnb has similar restrictions. “We expect Hosts to honor accepted reservations,” says spokesman Aaron Swor.
WHAT ARE YOUR RIGHTS WHEN YOUR VACATION RENTAL IS SOLD?
If your vacation rental is sold before you arrive, you have some rights – though not as many as you’d assume.
For rentals booked directly through the owner, your rental contract will outline your right to a refund. If you’re dealing with a host who has only one rental or can’t accommodate you at a different property, you’ll get a full refund but you’ll have to start over and find a new vacation rental. Pro tip: Use a credit card to book. If the owner flakes out and tries to keep your money, you can always dispute the charges.For rentals booked through a popular vacation rental platform like Airbnb or Vrbo, the platform will offer a full refund or or
accommodate you at a different rental property. If there’s a price difference – and there usually is – then the platform may offer to cover the extra cost.If you booked through a property management company, your rights may not be spelled out in your contract, but chances are the company will have a plan “B” ready. For example, Element Vacation Rentals has a policy to promptly present multiple options to displaced guests, including comparable properties from its portfolio and those of its competitors. Ask about the policy before you make a reservation.
At least, that is what’s supposed to happen if there’s a cancellation. But let’s talk about what actually does happen.
WHAT IF AN OWNER SELLS A VACATION RENTAL?
When an owner sells your vacation rental from under you, you’ll probably feel confused and upset. And even as you’re processing the loss of your rental, your host may ask you for a favor.
When the owners of Gerri Detweiler’s Airbnb rental sold their place, her host asked her to cancel the rental. The reason? The host didn’t want to incur a fee from Airbnb. So Detweiler, a personal finance expert from Sarasota, Fla., canceled the stay.
“I didn’t bother booking another rental with Airbnb,” she says.
For both of my cancellations, I had no choice. I was only days away from checking in.
To their credit, both Airbnb and Vrbo helped me. Vrbo found a new rental in Hawaii and covered the price difference. Airbnb offered a coupon and sent me a few options for a replacement rental in Bali. The only one available on such short notice was thousands of dollars more than my original rental, so Airbnb increased the amount of the coupon to cover the extra cost.
The difference between the platforms was in their approach to the situation. Vrbo transferred me to a special team that took care of everything quickly.
With Airbnb, it felt like more of a negotiation. But in the end, I was grateful to have the protection of both vacation rental platforms.
THIS COULD HAPPEN TO YOU
This isn’t an abstract issue. Two of this year’s hottest housing markets -Orlando and Tampa, Fla. – are popular with vacation renters and likely to have lots of homes that are also on the market.
But that’s not the real problem. It’s that most vacation rental customers don’t know their rights when they rent. They either assume they have no choice but to take the refund and that they’re on their own. Or they believe the vacation rental company must find them a comparable rental and cover any price difference.
But you’re not on your own unless you rented directly through an individual – and even then, the previous owner may be able to refer you to another rental. And your vacation rental platform won’t automatically find you a new place and pay for it. You may have to negotiate.
The best solution is disclosure. Vacation rental owners should tell you if their property is for sale. Then you can make an informed decision about whether you still want to rent the place – and take your chances.
ELLIOTT’S TIPS FOR AVOIDING A VACATION RENTAL CANCELLATION
Getting surprised by a vacation rental sale is preventable. Here’s my ultimate guide to renting a home in 2024. And here are a few strategies that might help:Talk to the ownerBefore you rent a vacation home, ask if the place is for sale. If it is, ask what would happen if the unit were to be sold. If it’s sold, talk to the new owners,” says hospitality consultant Steve Turk. “See if they’ll honor your reservation.”Read the reviews – all of themIf you’re renting on a popular platform, don’t just skim the reviews. Read them. Sometimes, hosts will stop caring about their rental unit if they know they’re going to sell. “Check to see if recent guests have posted any negative reviews,” advises Pete Evering, a business development manager at Utopia Property Management, a rental management company.Do your researchIf you have the address of the rental, run a quick online search. If it shows up on Zillow, or Realtor.com, you know you have a problem. Gordon from HiChee is considering developing technology that would notify travelers in case their booked rental shows up for sale on the internet. Have you ever had your vacation home sold out from under you?I’d love to hear about your experiences with vacation rental cancellations. Our comments are open.