Transition Phase - Who gets paid?

Bed & Breakfast / Short Term Rental Host Forum

Help Support Bed & Breakfast / Short Term Rental Host Forum:

This site may earn a commission from merchant affiliate links, including eBay, Amazon, and others.


Sep 6, 2022
Reaction score
Hi! Newbie here. My girlfriend and I are purchasing our first Inn. Although very exciting, also very overwhelming. This group is so valuable and I’m very fortunate to have stumbled upon this forum. We are taking over at the end of October. My question is, what happens to the revenue from bookings that happened before we took over but the guests are staying with us as new owners? We will be living on site and will be a bit more hands on than the previous owners. Apologies if this has been covered in the past but by doing a quick search I could not find anything.
my first thought is that this issue should be covered in you P&S agreement. But that doesn’t answer your question.
logically, deposits are part of the payment for the room, so should go to pay for the room which points to transfering them to the new owner. As for historically, or typically, I have no personal knowledge to share. I am interested in the responses you will get.
Deposits are payments made towards a future purchase. So whoever is in possession at the time of the sale (guest stay) should get the deposit. I say should because it doesn't always work that way unless you have that in writing before the sale (property purchase) goes through. Another bugger is gift certificates that were sold by the previous owner but you will be the one to honor them so any unused GC $ should be paid to the new owner. Again - should. Get it in writing - this is one of those life lessons we had to learn! I wish you all the best with your new venture!
The deposits they took are not technically revenue, as no services were provided yet. They belong to you if applicable to dates when you take over. Period. You need to make sure this is stipulated, as Beachy mentioned, in your contract. It is your revenue for services you will be providing. Also, all outstanding gift certificates need to be accounted for, and the previous owners need to pay you that amount at closing, so you are not incurring that expense belonging to them. [oops, Cyndi beat me to it, but we concur!]
Exactly. Deposits and unused PAID GCs are in the liability column and (in writing) should be paid to the new owners at closing. Donate GCs are not liabilities. IF you ever give (donated - not recommended) one, be sure to include at the bottom : No cash value Expires xx/xx/xx.
Cash taken for future stays are essentially "escrow" money and owed by the current owners to you or can be deducted at sale. I assume, they could deduct the 3% for CC. They also have to give you all the GC money, unless they have deposited with the government.