Holiday Rental Agreement AU: Deposit, Rules & Cancellation

In Australian practice, a short-stay rental agreement is generally treated as a contractual licence to occupy furnished premises for a holiday or business stay rather than as a lease. Courts look at substance, not labels, and since Radaich v Smith (1959) 101 CLR 209 the grant of exclusive possession has been the classic marker of a tenancy, which is why the statutory holiday exclusions matter so much for entire-home lets. Either way, the document is not a residential tenancy agreement. No prescribed standard form applies, no bond is lodged with a state authority, and statutory notice periods do not govern the guest's departure. A guest who stays for months and treats the property as home can drift into tenancy territory, at which point a residential tenancy agreement drafted to the prescribed standard terms becomes the correct instrument.

The document also differs from a lodger arrangement. When an owner rents a room in their own home to someone who lives there on an ongoing basis, a lodger and share-house room rental agreement fits better, because the occupant is a resident rather than a visitor. Hosts who list on Airbnb, Stayz or Booking.com often assume the platform's terms cover everything. They do not: those terms deal with payment and the platform's own liability, and say nothing about your pool gate, your maximum headcount or the party that cost you a new carpet. The Airbnb rental agreement fills that gap, and for direct bookings it is the whole contract.

The starting point is what the tenancy statutes exclude. In New South Wales, section 8(1)(bb) of the Residential Tenancies Act 2010 (NSW) takes out of the Act any short-term rental accommodation arrangement as defined in section 54A of the Fair Trading Act 1987 (NSW), that is, a commercial arrangement giving a right to occupy residential premises for not more than three months at any one time, provided the guest does not occupy the premises as their principal place of residence. Queensland reaches a similar result through section 31 of the Residential Tenancies and Rooming Accommodation Act 2008 (Qld), which deals with premises used for holidays, and the other jurisdictions carry comparable exclusions. The parties' contract therefore does the work that legislation does for a lease.

Sector-specific rules then sit on top. NSW hosts and guests are bound by the Code of Conduct for the Short-term Rental Accommodation Industry, in force since 18 December 2020, and dwellings must be registered on the state STRA Register. Victoria imposes a 7.5% levy on stays of fewer than 28 consecutive days under the Short Stay Levy Act 2024 (Vic), explained in the State Revenue Office Victoria guidance on the short stay levy. Western Australia made registration mandatory under the Short-Term Rental Accommodation Act 2024 (WA), and Tasmania's Short Stay Accommodation Act 2019 (Tas) requires listings to display planning permit or exemption details.

Across every state, the Australian Consumer Law in Schedule 2 of the Competition and Consumer Act 2010 (Cth) applies to hosts letting in trade or commerce. Accommodation is a service, so the consumer guarantees of due care and fitness for purpose attach to it and cannot be contracted out of. A standard form booking contract is also exposed to the unfair contract terms regime, and since 9 November 2023 an unfair term is not merely void but can attract civil penalties. No statute requires the agreement to be witnessed or notarised, and an electronic signature is valid under the Commonwealth and state Electronic Transactions Acts.

Direct bookings are the clearest case for a holiday rental agreement. A guest who books through word of mouth or your own website has no platform terms behind them, so without a signed short-stay rental agreement you are left arguing about an email thread. Owners who take bookings through a personal site should pair the agreement with website terms and conditions aligned with the Australian Consumer Law, since the booking engine and the stay itself raise different legal questions.

Platform bookings still benefit. Christmas group stays, schoolies week and wedding weekends are where house rules get tested, and a guest who signed a clause capping occupancy at eight and banning events is far easier to deal with than one who clicked through a listing. Longer stays of six to ten weeks come next: contractors on a regional project or families waiting on a settlement often book for that length, and the agreement must keep the arrangement a temporary stay rather than a tenancy.

Two edge cases deserve attention. In NSW, a guest whose own home is uninhabitable after a flood may argue that your property has become their principal place of residence, which takes the stay outside the section 8(1)(bb) exclusion whatever its length. And where the holiday home is held by a family trust or a company, the trustee or the company is the contracting party, so the agreement must be made in its name and signed by someone with authority to bind it.

• The parties and maximum occupancy clause names the lead guest and records every adult staying. It fixes a hard ceiling on overnight occupants and daytime visitors, which councils and strata committees treat as the first test of a party house.
• The stay period sets arrival and departure dates with precise check-in and check-out times. It states that the right to occupy ends automatically at check-out, with a daily overstay charge and no implied extension.
• The payment schedule records the total booking fee, the instalment dates and any cleaning charge. For Victorian direct bookings, it states whether the short stay levy is included in the price.
• The security deposit clause specifies the amount, who holds it and the categories of deduction (damage, extra cleaning, lost keys, breaches of house rules). It sets a deadline for returning the balance with an itemised statement.
• The cancellation policy sets out tiered refunds by notice period, together with a natural disaster clause covering bushfire, flood and official evacuation orders. Tiers are calibrated to the host's genuine loss so they survive scrutiny under the unfair contract terms regime.
• The house rules cover noise curfews, parties, smoking, pets, pool and spa safety, waste and parking. For NSW properties, the clause incorporates the guest obligations in the Code of Conduct.
• The damage and liability clause makes the guest responsible for loss caused by their party beyond fair wear and tear and requires prompt reporting of breakages. Any limit on the host's own liability is drafted within what the consumer guarantees allow.
• The privacy and surveillance clause discloses any external cameras and prohibits recording inside living or sleeping areas, a line drawn sharply by the Surveillance Devices Act 2007 (NSW) and its counterparts in other states. It also explains how guest identification is collected and stored.

New South Wales has the most structured regime in the country. Every dwelling offered as short-term rental accommodation needs a registration number on the STRA Register, and that number should appear on the agreement. Non-hosted stays in Greater Sydney are capped at 180 nights in each 12-month period, bookings of 21 or more consecutive days do not count toward the cap, and Byron Shire applies a stricter 60-night limit in most of its area. Under section 137A of the Strata Schemes Management Act 2015 (NSW), an owners corporation can adopt a by-law by special resolution prohibiting short-term letting of lots that are not the owner's principal place of residence. Two strikes recorded under the Code of Conduct within two years can place a host or a guest on the exclusion register for five years.

Victoria combines a statewide levy with building-level control. The levy under the Short Stay Levy Act 2024 (Vic) applies to stays of fewer than 28 consecutive days, with an exemption for a host letting all or part of their own principal place of residence. Platforms collect it on their bookings, but a host taking direct bookings must register with the State Revenue Office and lodge returns. The same Act amended the Owners Corporations Act 2006 (Vic) so an owners corporation can ban short stays by special resolution, although the rule cannot reach a lot that is a principal place of residence, and councils keep the power to require permits or cap nights.

Queensland relies on section 31 of its tenancy Act for the holiday exclusion and leaves most regulation to local government. Several councils require a planning approval or permit for short-term letting, and Noosa Shire Council runs its own permit system. Body corporate by-laws under the Body Corporate and Community Management Act 1997 (Qld) generally cannot prohibit letting a lot outright, so building control works mostly through conduct by-laws on noise, parking and pool hours.

Western Australia requires every short-term rental property, hosted or unhosted, to be registered under the Short-Term Rental Accommodation Act 2024 (WA). In the Perth metropolitan area, unhosted properties let for more than 90 nights in a 12-month period need development approval, and since 1 January 2026 owners must show planning compliance to stay registered. A host who exceeds the exemption without approval risks enforcement action and loss of registration, so the agreement should record the registration number.

You start by selecting the state or territory where the property sits. The form then adjusts the statutory references, adds the Code of Conduct wording for NSW properties and flags the levy question for Victorian direct bookings. Next, you indicate whether the stay is hosted or unhosted, which changes the access and privacy clauses. The booking details come after that: the lead guest and other adults, the arrival and departure dates, and the check-in and check-out times. You then record the booking fee, the instalment schedule and the security deposit, choosing how many days you allow to return the balance, before picking one of the tiered cancellation structures.

House rules are drafted from options covering events, smoking, pets, noise curfews and pool use, with a free text field for matters such as a fire pit or a bore water supply. If you collect guest identification, the agreement refers to how you handle it, and a privacy policy built on the Privacy Act 1988 and the APPs gives that reference a proper footing. Once the questionnaire is complete, you download the short-stay rental agreement, send it to the guest for signature and keep the signed copy with your booking records.

The most frequent error is using a residential lease form for a holiday booking. Hosts do it because the form is familiar, but importing tenancy language invites a guest to argue that a tenancy was created, with the notice and bond rules that follow. The reverse mistake is just as costly. Length alone does not decide the question: in NSW a stay of under three months falls back under the tenancy Act if the guest genuinely lives there, and a longer stay sits outside the section 54A definition altogether. Another recurring problem is the deposit taken without evidence. A host who cannot produce dated photographs of the property before arrival will struggle to justify any deduction, whatever the agreement says.

Cancellation clauses that keep every dollar regardless of notice are the next trap. Under the Australian Consumer Law, a term that causes a significant imbalance and is not reasonably necessary to protect the host's legitimate interests can be struck out, and a forfeiture out of all proportion to the host's loss also invites a challenge under the penalty doctrine. Airbnb hosts sometimes ask for a separate deposit by bank transfer, which breaches the platform's rules on off-platform payments. Apartment hosts regularly skip the strata by-laws or owners corporation rules, then discover a prohibition after a neighbour complains. Check your registration and building rules before you sign the first guest, not after the first complaint.