US Rental Arbitrage Lease Addendum
A lease addendum that amends an existing residential lease to explicitly permit and regulate short-term subletting (rental arbitrage). Protects the landlord and gives the operator the written authorization platforms and insurers require.
What's included
- Reference to the underlying lease being amended
- Express permission for short-term subletting
- Permitted platforms and maximum stay limits
- Additional rent / revenue share to landlord (optional)
- Insurance and STR liability coverage requirements
- Compliance with local STR ordinances & HOA rules
- Additional security deposit and damage terms
- Indemnification of the landlord
- Termination and default conditions
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Inside the document
1. Incorporation of Lease
This Rental Arbitrage Addendum ("Addendum") is attached to and made part of the residential lease agreement ("Lease") between the Landlord and the Tenant for the Property. Where this Addendum conflicts with the Lease, this Addendum controls with respect to short-term rental use.
2. Permission to Operate
The Landlord expressly authorizes the Tenant to sublet the Property on a short-term basis ("Short-Term Rental") through approved booking platforms, subject to the conditions in this Addendum. Without this written permission, short-term subletting would be prohibited.
3. Permitted Use and Limits
The Tenant may list the Property on the platforms approved in writing by the Landlord. The Tenant remains fully responsible for the conduct of all short-term occupants and for compliance with the maximum occupancy of the Property.
4. Additional Rent / Revenue Share
In consideration of this permission, the Tenant shall pay the Landlord [additional monthly rent of $______] OR [____% of gross short-term rental revenue], due on the same schedule as base rent. This is in addition to the base rent under the Lease.
5. Insurance Requirements
The Tenant shall maintain short-term-rental / commercial liability insurance of not less than $______ naming the Landlord as an additional insured, and shall provide proof of coverage before listing the Property. Platform host-protection programs do not satisfy this requirement on their own.
6. Regulatory Compliance
The Tenant is solely responsible for obtaining any short-term-rental permit or license required by the municipality, collecting and remitting occupancy taxes, and complying with all HOA, condo, or building rules. The Tenant shall indemnify the Landlord for any fine or penalty arising from non-compliance.
7. Security Deposit and Damage
The Tenant shall provide an additional security deposit of $______ to cover the increased wear and risk of short-term use. The Tenant is liable for all damage caused by short-term occupants beyond normal wear and tear.
8. Indemnification
The Tenant shall indemnify, defend, and hold the Landlord harmless from any claim, damage, or liability arising from the short-term rental activity, including claims by short-term occupants, neighbors, or the municipality.
Frequently Asked Questions
Why do I need a landlord's written permission?
Most standard leases prohibit subletting. Running Airbnb without written permission is a lease violation that can get you evicted, and insurers and platforms may deny claims. This addendum makes the arrangement explicit and enforceable.
Does this guarantee my city allows STR?
No. It handles the landlord relationship. You must still obtain any local STR permit and comply with zoning and HOA rules — clause 6 puts that responsibility on the tenant.
Should I offer the landlord a revenue share?
Offering additional rent or a small revenue share (clause 4) is often what convinces a landlord to sign. It aligns incentives and compensates for the added wear and risk.