The STR Management Agreement: The Clauses That Decide Whether Co-Hosts Actually Get Paid

Most co-host agreements are a fee percentage and a handshake. Here are the nine clauses that decide what you earn, what you eat, and what happens when an owner walks.

Most co-hosting agreements are three pages of pleasantries wrapped around a single number: the fee percentage. That is the clause operators negotiate hardest and the one that matters least, because a 20% fee on the wrong base with no termination protection pays less than a 15% fee written properly.

The agreement is the operating system of your management business — it determines what you are paid on, what you may spend, what you promised to deliver, and what you are owed when an owner leaves. And owners do leave: property management companies lose 8% to 15% of owners every year, and acquiring a new owner costs five to ten times more than keeping one, at $750 to $5,000 per door.

Clause 1: The Fee Base — Gross, Net, or Something Worse

A management fee is meaningless until you define what it is a percentage of. Fee on gross booking value is the operator-friendly position: you take your cut of everything the guest paid, before platform fees, before cleaning, before lodging tax. Fee on net payout — what actually lands after Airbnb takes its cut and taxes are remitted — is the owner-friendly position, and the gap between them is not academic.

On a property doing $120,000 in gross bookings, a 20% fee on gross is $24,000. The same 20% on a net payout of roughly $91,000 after platform fees, cleaning pass-throughs, and lodging tax is $18,200. Same percentage, same property, $5,800 of difference — and most fee disputes start in an agreement where the word gross was never defined.

The definitions that must be explicit

• Whether cleaning fees are inside or outside the fee base, and whether the cleaning fee is a pass-through to the cleaner or revenue you keep and pay the cleaner from — these are different businesses with the same name.
• Whether lodging and occupancy taxes are excluded from the base, which they should be, because charging a management fee on money you are legally required to hand a municipality is indefensible the moment an owner reads their statement carefully.
• How refunds, chargebacks, and cancellations claw back a fee you have already taken, because without a clawback mechanic in writing you will be arguing about it in the middle of a refund fight with a guest.
• Whether the fee applies to direct bookings at the same rate, since a direct booking carries no platform fee and does carry your marketing cost.

Whatever base you land on, you need to be able to prove it every single month at the property level. MagicBnB's Profitability & P&L gives you two views — a portfolio snapshot and a per-property scorecard with a full expense category breakdown — plus filter modes for at-loss, low-margin, improving, and highest-expenses properties. When an owner asks why the fee on their door came to $1,840 this month, you open the scorecard and show the gross-to-net path rather than reconstructing it from a payout screenshot at eleven at night.

The full economics of how to price a co-hosting business, including where the 20% standard breaks down, are covered here: magicbnb.io/blog/co-host-pricing-guide-management-fees.

Clause 2: Termination — the Clause That Decides Your Enterprise Value

The termination clause is the clause a buyer of your business will read first and the one most co-hosts never negotiate. Industry-standard agreements carry a 30 to 90 day notice period, and it is common for early termination to carry a fee equal to one to three months of management fees — but common is not the same as present in your contract, and a 30-day no-cause termination with no fee means your owner book is worth close to nothing on a balance sheet.

This is the mechanism that turns owner churn into a business-ending event rather than a bad month. Contracts with longer terms, exclusivity, and limited termination rights command premium valuations precisely because they reduce a buyer's risk that owners leave — and the same protection that makes your business sellable is what keeps a single owner departure from taking three doors and a quarter of booked revenue out the door with it.

What a termination clause needs to say

Set the notice period at 60 or 90 days rather than 30, so a departing owner cannot strand you mid-season. Specify who honors reservations already on the books after the notice period ends — the standard position is that the owner must honor existing bookings or the manager must find the guests suitable alternative accommodation, and if your contract is silent you will be the one refunding guests out of pocket. Define what happens to your fee on those bookings, because a reservation you sourced and serviced that stays after you are gone is money you earned. And keep a for-cause termination path in both directions, because you also need a way out of an owner who will not fund maintenance.

An Austin co-host running eleven doors across seven owners lost two owners in a single quarter — an 18% annualized churn rate, above the industry band. Her agreement had a 30-day no-cause termination and said nothing about post-termination reservations. The two owners took three doors with them, and $86,000 of booked-but-unstayed reservations she had sourced went with the doors at zero compensation. She rewrote the template to a 90-day notice, a post-termination fee equal to her management percentage on all reservations she originated, and a two-month early-exit fee. The next departure cost her about $4,000 instead of $17,000 in lost fees, and the rewrite took an afternoon.

A management agreement is not a document about how the relationship works. It is a document about how the relationship ends — and the operators who understand that get paid on the way out.

Clause 3: Spending Authority and the Maintenance Threshold

Every agreement needs a dollar figure above which you must get owner approval before spending, and below which you may act without asking. Set it too low and you are texting an owner about a $60 plumbing part while a guest sits in a flooding bathroom. Set it too high and you are personally exposed for a $4,000 HVAC decision the owner will dispute afterward.

The practical range for a furnished STR is a $250 to $500 threshold for routine repairs, with a written emergency exception that lets you act immediately at any dollar amount when a guest's safety, the property's habitability, or an active reservation is at risk — with notification to the owner within 24 hours. The emergency carve-out protects you on the worst night of the year, and most templates leave it out.

The second half of the clause is who funds it. A reserve of $500 to $1,500 per door, held by the owner and replenished monthly from their payout, means you are not floating owner expenses on your own credit card — which is how co-hosts quietly become de facto lenders to their clients.

The operational failure that follows a vague spending clause is an allocation failure: money moved and nobody recorded which door it belonged to. MagicBnB's Expense inbox is a focused queue of unallocated transactions only — it isolates the 20% of line items that need a decision from the 80% already categorized correctly, so a fifteen-minute weekly pass keeps every owner's expense ledger current. When the owner asks in November what the $840 in September was for, the answer is a categorized transaction tied to a property and a date, not an argument.

Clause 4: Performance Standards and What You Promise in Writing

Owners increasingly want performance language in the agreement, and operators should want it too — but only language they can actually control. Occupancy guarantees are a trap: occupancy is a function of market demand, competitive supply, and pricing, none of which you can promise in a market where AirDNA's 2026 outlook has US occupancy averaging 57.4% and listing supply still growing 4.6% year over year. Guaranteeing 75% there is guaranteeing a lawsuit.

Promise the inputs instead: guest response time under an hour during defined hours, listing optimization reviewed quarterly, dynamic pricing tooling deployed and actively tuned, a monthly statement delivered by a fixed date, and a rating threshold with a defined remediation process if it slips. These are commitments you control.

The reason this matters commercially is stark: only 23% of owners say their property manager delivers excellent value, and poor responsiveness plus maintenance cost surprises are the two things most likely to drive them to leave. A retention improvement of 5% has been associated with revenue increases of 25% to 95% across service businesses — which means the clause you write about responsiveness is a revenue clause, not a legal one.

Owners do not churn because the numbers were bad. They churn because they could not see the numbers. MagicBnB's Portfolio Overview produces shareable URLs — you send a link and the owner sees exactly what you see, with the occupancy, ADR, RevPAN, and net payout KPI strip, the net payout sparkline against the prior period, and time-range presets they can change themselves. An owner who can check their own performance at midnight without emailing you is an owner who is not building a case against you in silence.

The pitch that wins the contract in the first place runs on the same logic: magicbnb.io/blog/how-co-hosts-win-owner-contracts.

Clause 5: Reporting, Records, and the Statement Cadence

Reporting is the single most common trigger for the conversation that ends with an owner interviewing your replacement. The agreement should state what the statement contains, when it arrives, and what backup you will produce on request.

Commit to a fixed delivery date — the 10th of the following month is a defensible standard — and to a statement that reconciles to the bank, shows the gross-to-net path explicitly rather than netting everything into one number, and looks structurally identical every month so the owner learns to read it once. Then commit to producing the underlying transaction detail within a stated number of business days if they ask. An owner who has to chase you for a statement is already shopping.

This is exactly the job the Monthly Portfolio Report Builder was built for: a guided builder with month and property pickers, 40-plus column definitions grouped by Booking, Financial, and Taxes & Payout, a live WYSIWYG preview, and dual PDF and Excel export from a single click — the PDF for the owner, the Excel for their accountant. Save the column set as a named template and every owner receives a structurally identical statement on the same date every month, which converts the riskiest clause in your agreement into a repeatable ten-minute task instead of a Saturday morning.

What a statement owners actually trust looks like, line by line: magicbnb.io/blog/how-to-build-monthly-owner-statement.

The Remaining Four: Insurance, Exclusivity, Owner Stays, and Liability

Four clauses round out the agreement, and each of them has a version that quietly costs you money.

• Insurance and indemnity: name who carries the STR policy, require the owner to add you as an additional insured, and state which losses you are responsible for — platform programs like AirCover are not insurance and will not cover the claim that matters most.
• Exclusivity and channel control: state that you control listing, pricing, and channel distribution during the term, because an owner who quietly lists the same door elsewhere creates a double-booking that lands on your reputation, not theirs.
• Owner stays and blocked dates: cap owner personal use at a defined number of nights and specify whether peak dates are blocked — an owner who takes the four best weeks of the year has cut your fee and your revenue benchmark at once.
• Liability and the standard of care: define the standard as reasonable care rather than a guarantee of outcomes, and cap your liability at a multiple of fees earned, because an uncapped indemnity on a door earning you $18,000 a year is a risk no fee percentage compensates for.

Frequently Asked Questions

What is a normal termination clause in an STR management agreement?

The industry standard is a 30 to 90 day notice period, frequently paired with an early termination fee equal to one to three months of management fees. The clause that most agreements omit and most operators need is what happens to reservations already on the books after the notice period expires — the defensible position is that the owner honors existing bookings and you retain your fee on reservations you originated, or the owner buys them out. Without that language, a departing owner takes your booked revenue with them at no cost.

Can I guarantee an occupancy rate to an owner?

You can, and you should not. Occupancy depends on market demand, competitive supply, and pricing decisions that respond to both, and AirDNA's 2026 outlook has US occupancy averaging 57.4% with supply still expanding 4.6% year over year. Promising a number in that environment converts a market risk into a contractual liability you carry personally. Commit instead to the inputs you control: response times, pricing tool tuning, listing optimization cadence, statement delivery dates, and a rating threshold.

How often do property managers lose owners?

Most property management companies lose 8% to 15% of owners annually, and the departures are rarely a single door — an owner with four properties takes four. Acquisition costs of $750 to $5,000 per new door mean churn is expensive twice: you lose the recurring fee and you pay to replace it. Given that only 23% of owners report that their manager delivers excellent value, and that responsiveness and cost surprises are the leading causes of departure, the reporting and communication clauses in your agreement do more retention work than the fee percentage ever will.

Do I need a lawyer to write an STR management agreement?

Use a template to draft it and a licensed attorney in the property's state to review it before you sign the first one. The clauses that carry real legal weight — indemnification, liability caps, trust and custody of funds, insurance requirements, and termination mechanics — are state-specific and are exactly the ones a generic template gets wrong. That review is a one-time cost amortized across every owner you sign afterward. This article is operational guidance, not legal advice.

Prove the fee base at the property level, hand owners a live view of their own numbers, and ship a statement on the same date every month without touching a spreadsheet. Run your owner book on MagicBnB →

About MagicBnB

MagicBnB is a portfolio intelligence platform for co-hosts and management companies who get paid on numbers they can defend. Profitability & P&L produces a per-property scorecard with a full expense category breakdown so a fee dispute takes one screen instead of one evening, Portfolio Overview generates shareable URLs that let an owner see exactly what you see with occupancy, ADR, RevPAN, and net payout in one KPI strip, and the Monthly Portfolio Report Builder ships PDF-and-Excel owner statements from named templates on the same date every month. Keep the owners you already have at magicbnb.io.