There has been considerable recent activity concerning the vacation home rentals market and the opportunities for travel agencies. The concept is not new and has been marketed primarily to U.S. agents for overseas short-term home rentals, but its spread in the U.S. and worldwide has recently been the subject of tremendous growth.

Figures ranging from 50 to 80 percent increases in the past year have been cited. One home vacation provider recently stated that it now provides more available rooms then the three largest hotel companies combined.

Obviously, this is not a trivial market and has tremendous potential for travel agents. But it also has considerable risk.

As a travel law attorney who also co-owns a real estate brokerage firm, my legal time is often divided between both ends of this spectrum. Many realtors are generally not in favor of short-term "vacation rentals" due to a number of factors, but mostly because it cuts into their business by taking away from the market homes that could be used as longer-term rental properties or sales.

On the other hand, realtors — especially in South Florida and other areas of the country that receive much of their business from investment clients — are open to other markets besides the long-term rentals. A number of these international investors are simply looking to move money into the U.S. and start receiving an immediate return on the purchase through rentals, short or long term, rather than swaps.

However, home and condo associations do not usually look with favor upon these vacation rentals. Many prohibit more than one or two rentals per year. The investment market in rental properties has grown significantly thereby causing a severe lack of reliable property management employees and leaving property management companies in constant need of employable individuals.

Thus, a lot of new employees lack the experience needed in this market to service the vacation rental homes that are in constant need of cleanup and repairs between rental periods. Quality control is cited as a major issue among travel agents and suppliers.

What does all of this mean for the travel agent?

There is potential for a big market, but it is also an area of looming concern and liability. To begin with, houses are not hotels or cruise ships. They do not have to conform to safety standards — especially fire — in the way a hotel would.

Maintenance is always problematic, and the turnaround time between guests could provide questions of sanitation and overall cleanliness. Pictures and descriptions of the vacation home may be no more reliable than those provided by clients of online dating sites. The home may not conform to local zoning or to homeowner association’s rules.

Further, there may be insurance issues in regard to injuries as a standard homeowner's insurance policy may not cover a guest of a business enterprise. Remember, these are not home exchanges but business ventures. Travel agents often find themselves somewhat out of their typical comfort zone in literally acting as short-term real estate agents.

Who is the injured or unhappy client first likely to sue? In our law firm's experience, the travel agent is not only the closest target but often the only target judicially and financially available. Thus, I would fervently stress the importance of a high level of due diligence when involved in the rental of vacation homes.

A lot of big and well-known companies have entered the market, but it is important — especially if you are not familiar with the company — to find out all that you can about the business that is offering vacation home stays and their history of consumer satisfaction.

Do they offer satisfaction guarantees? Are they insured? Do they maintain insurance on the properties on behalf of your client? How long have they been in business? Is your agency indemnified for client injuries and losses? These are just a few of a host of questions that you would ask if you were to be a guest.

Google the area to determine if the property meets its advertisements, including a look at satellite photos (A great tool when planning any client's vacation stay). There continue to be a number of scams wherein vacation stays are offered in homes that are not even in the vacation market and are fully occupied by the homeowner.

If there is any question, you may wish to ask your realtor or attorney to run a property search on the deed. Be certain that your advertisements and websites contain the proper third-party nonliability disclosures and make full use of waivers and disclaimers. With proper research and due diligence, your legal defenses will be much stronger if things do go wrong.

Finally, do not offer refunds out of your own pocket without first consulting with your lawyer. Refunding for the fault of another party can be seen as an admission of guilt. It is a terrible business practice and can result in travel agents looking for their own long-term vacation homes after their business has folded.