I see it all the time. Hosts, owners, professional managers - they get this idea to turn their rental into a wedding and event property. Or, they decide to allow a bachelor party, birthday party, or other event to happen at their rental home or condo. Don’t do it. Here is why:

A short-term rental home is just that. AirBnb even defines it in their Host Damage Protection Terms. “Covered Accommodation” means an Accommodation that can be used as a residence and that is (i) owned or legally controlled by you as a Host during the period of the Responsible Guest’s stay at such Accommodation and (ii) listed by you on the Airbnb Platform and booked by such Responsible Guest in compliance with the Terms. A “Covered Accommodation” is only that to the extent it is stationary and used solely for lodging purposes.”

Referring to the AirBnb terms further, "The Host Damage Protection is not an insurance policy. To the extent you desire protection beyond the Host Damage Protection, Airbnb strongly encourages you to purchase insurance that will cover you and your property for losses caused by Guests or Guests’ invitees in the event your loss is not within the terms of the Host Damage Protection." This is the part where they are saying, "you better have 'event insurance' - cause we are not covering events".

Whether your rental is with AirBnb, Vrbo, or a professional rental agency - Using an accommodation (Short-Term Rental) property for something other than accommodations, now means it isn’t that. It’s an “Event Property” and needs insurance coverage for that. If you call your insurance agent and say, “hey, I am planning to allow 18 people to use my 3 bedroom rental accommodations for a bachelor party”, any educated insurance agent is going to say, “you better have your renter get event insurance!” If you ‘Google’ event insurance, you’ll find there are tons of companies that offer it. The renter should purchase it, add you, the property owner, agent, or both, as “additional insured”, and then provide you a copy that shows the event is covered at your rental. Be sure that the guest has liquor liability! This is an example of a event insurance certificate. Be sure to have your primary insurance agent review it as well…

Of course safety comes into play - and that is what I focus on. Is your rental able to safely accommodate a lot of people. Can the deck hold up to the weight of all the people? Can everyone get out safely in a fire? Just the safety considerations alone should be enough to make you reconsider having the event.

When I was a vacation rental property manager, we had these terms in our rental agreement that covered this topic as well…

Section F - Occupancy, Events & Family Groups: Rental of the Property is permitted for family groups only. An “Event” is defined as a gathering of more than 1.5 times the maximum occupancy of the Property published on the website for the Property. No Events are permitted at the Property unless prior approval is received from the OWNER through an addendum to this Vacation Rental Agreement. GUEST is solely responsible for ensuring that the maximum number of overnight occupants is not exceeded. Should the maximum number of overnight occupants be exceeded at any time during the rental term, this is automatically a significant and material breach of this agreement by GUEST.

There are several other reasons to consider when thinking about allowing an event at your rental property. First, these news stories….

• Laurel Highlands AirBnb used as event property burned to the ground while renters occupied it - July 2021

• 21 People injured in deck collapse at unapproved event at a Malibu vacation rental - May 2021

• All the unsanctioned parties at rentals around the US where shootings keep happening. Those hosts are on the hook for that.

• Event guests are not “repeat guests”. The primary goal in renting our your property should be to generate income at a low cost. You want renters to come back. Those that come to party don’t come to create a memorable stay and come back and rent again.