A Guest or a Tenant…that is the question!

In the lodging area, a guest can be classified as being either a transient guest i.e., a customer who rents property for a relatively short period of time with no intent of establishing permanent residency, or a tenant who rents real property for an extended period of time with the intent of establishing permanent residency. The differences are significant although not easily established.

Since the courts do make a distinction between the two even when hospitality managers do not, it is important to establish and state those differences as clearly as possible. A transient guest, for example, who checks into a hotel for a one-night stay but does not pay for the room by the posted check-out time the next morning may be “locked out.” In other words, in a hotel with an electronic locking system, the Front Desk Manager could deactivate the guest’s key, thus preventing readmittance to the room until such time that the account was settled. On the other hand, a tenant with a lease enjoys greater protection under the law, and could not be locked out so easily. In most states, this individual establishes a property right in the leased premises, and a judicial eviction (also known as a forcible entry and detainer) is usually required to remove a tenant from the leased premises. A transient guest, on the other hand, does not establish a property right, and although he enjoys a right to privacy as a guest, this is superseded by the right of the innkeeper to enter at reasonable times for housekeeping, maintenance, and security purposes, with or without the guest’s permission. From the innkeeper’s perspective, the differences are important in a number of other areas.

Most state limited-liability statutes apply to the innkeeper/guest relationship, but not to the landlord/tenant relationship. Many statutes and ordinances–particularly those regarding locks on doors and windows, and swimming pool parameters–are often more burdensome for landlords than they are for innkeepers. To comply with the applicable law, it is important for an innkeeper to know whether his occupants are transient guests or tenants. This information allows him to ensure his right of entry, and leaving limited liability protections, and lock-out capabilities intact.

It is sometimes a matter for the courts to decide whether an individual is a transient guest or tenant, but the following characteristics can help in making that determination:

  • Billing format. Transient guests tend to be charged a daily rate for their stay; tenants are more likely to be billed on a weekly or monthly basis. Tax payment. Transient guests must pay local occupancy taxes; tenants are ordinarily exempt from such payment.
  • Address use. Transient guests generally list another location as their permanent address; tenants generally use the facilities’ address as their permanent address for such things as mail, driver’s license, voter registration, and the like.
  • Contract format. Transient guests generally enter into a rooming agreement via a registration card; tenants normally have a lease agreement or a specific contract separate from, or in addition to, their registration card.
  • Existence of deposit. Transient guests generally do not put up a deposit. This is true even if the hotel requires a transient guest to present a credit card upon checking into the hotel. Tenants are almost always required to give their landlord a deposit. Often this deposit is equal to a specified number of months of rent.
  • Length of stay. While it is widely believed that any guest who occupies a room in excess of 30 days becomes a tenant, the fact remains that length of stay is usually not the sole criterion on which the transient guest/tenant determination is made. Most guests who occupy the same hotel room for over 30 days may do so without affecting their transient status. It is true, however, that the length of stay for a tenant does tend to be longer than that of a transient guest.
  • Existence of a permanent residence. The question whether the occupant owns or leases a residence at a location other than the lodging property remains a pertinent one. Transient guests usually have “permanent” residences at other locations; tenants intending to establish a permanent primary residence at your property ordinarily do not.

For a statement which can be added to a hotel registration card and helps to demonstrate the intent to maintain an innkeeper/guest relationship, visit:  www.HospitalityLawyer.com and click on “Visit the Solution Store” under the Find A Form Solutions Menu.

For further information on this topic check out Long Term Hotel Guests Might Not Be So Easy to Remove by Sandy Garfinkel and Eric J. Zagrocki of Eckert Seamans.

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