Short answer: in a homestay management agreement, the line that decides how much you take home — and whether you get your unit back cleanly — is not "what percentage". It is the other eleven: who approves expenses, who owns the Airbnb listing, what happens to bookings already on the calendar when you leave, under what conditions the deposit is refunded, and whether the statement and payout dates are fixed in writing. Here is each clause with fair wording and red-flag wording side by side.
Why is "the percentage" the least important clause?
Because it is the one every company volunteers and the one you can compare in ten seconds. The places owners actually lose money are the ones nobody thinks to ask about: how "expenses" is defined, the exit terms, and who the listing belongs to.
We manage more than 100 units across Johor Bahru and Desaru. We have read the contracts owners bring with them when they switch from another company, and we have written our own. The 12 clauses below are what we think every owner should go through line by line — against any company's contract, including ours.
How the three common split plans are calculated, and which one pays more, is a separate article with the full maths: 90% of revenue vs 80% or 70% of net profit. This one is only about the words in the contract.
The 12 clauses at a glance: fair wording vs red-flag wording
| # | Clause | Fair wording | Red-flag wording |
|---|---|---|---|
| 1 | Basis of the split | States "gross revenue" or "net profit" and defines both | "80% to the owner" with no word on 80% of what |
| 2 | Definition of expenses | Lists each item; says whether platform commission counts; cleaning per turnover or monthly | "All operating-related expenses" in one line |
| 3 | Expense approval | Repairs above a stated amount (say RM300) need owner consent, emergencies excepted | Company decides repairs with no ceiling |
| 4 | Loss months | Says what happens when expenses exceed revenue | Not mentioned (the most common gap in net-profit plans) |
| 5 | Statement and payout | Statement by a fixed day each month, line by line; payout by a fixed day | "Regular reporting" |
| 6 | Listing and reviews | Listing sits on the owner's Airbnb/Agoda account, or is handed over on exit | Listing belongs to the company; reviews reset to zero when you leave |
| 7 | Exit and existing bookings | Company earns on stays before the exit date; later bookings are cancelled at the company's cost or transferred, no further commission | Company keeps managing and charging on every booking "taken" before the exit date |
| 8 | Term and notice | No fixed term plus two months' notice, or a fixed term with exit conditions spelled out | Auto-renewing three-year term, early exit penalty of several months' fees |
| 9 | Owner deposit | Amount, refund conditions, and what counts as "early exit" (does selling count?) | "Refundable subject to circumstances" |
| 10 | Owner's own use | Nights per year, notice period, cleaning charged at cost | Not mentioned, or the owner must "book" their own unit at market rate |
| 11 | Licence, building and fines | Who deals with the JMB/MC, who pays fines, what happens if the building bans short stays | All on the owner, but the company has no duty to warn you |
| 12 | Insurance and damage | Guest damage comes from the guest deposit first, with photos; excess allocated clearly | "Normal wear and tear" undefined; all damage to the owner |
Now each one, and why the fair version is fair.
Clauses 1–2: why must the basis and the expenses be defined word by word?
"80% to the owner" can differ by a few hundred ringgit a month between two companies. One counts Airbnb's platform commission as an expense, the other does not. One charges cleaning per checkout, the other as a monthly package. Same 80%, different take-home.
The contract should contain a definitions paragraph: gross revenue = room charges received from all platforms (state whether cleaning fees are in or out); expenses = an itemised list: cleaning, utilities, internet, consumables, platform commission, repairs, lock and key replacement. What is listed counts; what is not listed cannot be deducted.
Our own three plans are tabled in full in the plans article: on the 90%-of-revenue plan every expense is paid by the owner; on the 80% and 70% net-profit plans expenses come off revenue first, then the split. Whichever company's contract you are holding, find the definitions paragraph first. If it is not there, it is the first thing to add.
Clauses 3–4: who approves expenses, and what happens in a loss month?
The approval threshold. Replacing a RM60 shower head should not need your sign-off. Replacing a RM2,000 air-conditioner compressor should. A fair contract names a number: "repairs above RM300 per item require the owner's written consent, except emergencies (water leak, power failure, lock failure)". Without this clause, a net-profit plan becomes the company spending your money without asking.
Loss months. The gap most often left in net-profit plans. An off-peak month brings RM1,200 of revenue and RM1,500 of expenses — who covers the RM300? Three reasonable answers: carry it against next month's revenue, the owner tops it up, or the company absorbs it. Any of the three works, but it must be written. If it is not, the first loss month is the first dispute.
Clause 5: which day does the statement arrive, and which day does the money land?
"Regular reporting" is not a clause, it is a pleasantry. The contract should fix: the day of the month the previous month's statement is issued; that it is line by line (every booking, which platform, gross, deductions, net); the day payout is made; and which platforms pay late (Agoda and Booking.com settle monthly; Airbnb pays after check-out).
Our practice is described in what an owner actually takes home: one statement a month, every line, marked received or pending, and the owner portal open on any day. Before signing anywhere, ask for a real, anonymised owner statement from that company. If they cannot produce one, ask yourself why.
Clause 6: who owns the Airbnb listing and its reviews? The trap most owners find too late
An Airbnb listing with two years of history and 80 good reviews is an asset in itself. The question is: whose account is it on?
If it is on the management company's account, the listing does not leave with you. Reviews reset to zero, and a new listing's first months suffer on visibility and pricing. This is not a particular company being wicked; it is how Airbnb and Agoda work. The account owns the listing.
Two fair ways to write it: one, the listing is created on the owner's own account and the company manages it as co-host; two, the listing is on the company's account but the contract obliges the company, on exit, to hand over listing content, photos and pricing data, and not to keep taking guests on that listing after the owner has left. The second does not let the reviews follow you, but it does stop your unit staying live on somebody else's account after you have gone.
On this clause we owe you honesty: most of the units we manage are operated under consolidated company accounts, because one account across a hundred units is what makes unified pricing, unified replies and a platform relationship possible. That is good for operations and worse for an owner on the way out. So our advice, whoever you sign with: put "what happens to the listing on exit" in the contract. Do not leave it verbal.
Clauses 7–8: when you leave, what happens to the bookings on the calendar?
This is tied to clause 6. Say you give notice in March, effective May, and the calendar already holds June, July and August bookings. Who serves those guests? Who gets paid?
Fair wording: stays with check-in before the exit date are serviced and commissioned as normal; bookings after the exit date are either cancelled by the company at its own cost (platform penalties included) or transferred with guest details to the owner or the owner's next company, with no further commission.
Red-flag wording: "the company retains the right to manage and charge its fee on all bookings received during the term" — meaning that after you leave, the company still takes a cut of your unit's income for months.
Term and notice. Airbnb management guides from the US and Australia agree almost unanimously: avoid long terms with heavy penalties. Of our three plans, the 80% and 70% plans have no fixed term and two months' notice; the 90% plan is a three-year term, and leaving early forfeits the RM5,000 deposit — by those guides' standard, that is in the red-flag column. We are not going to dress it up. The logic of the 90% plan is that the company takes only 10%, and three years is how the upfront effort is spread out. If there is any chance you will sell, move in, or switch to long-term letting within three years, do not sign the 90% plan; sign the 80%.
Clause 9: under what conditions is the deposit refunded, and does selling the unit count as "early exit"?
A deposit clause needs three things: the amount, the refund conditions, and what counts as early exit.
The third is the one usually missing. You sell the unit after two years and the new owner does not want a homestay — is that a breach? Fair wording lists sale of the unit, owner moving in, and the building banning short stays as non-breach exits, with the deposit refunded in full or pro rata. If it is not listed, the default reading is breach.
One more distinction: the owner deposit (what you pay the company) and the guest deposit (what guests pay to cover damage) are two different sums; do not let one clause blur them. How guest deposits are handled is in the problem-guests article: deductions come with photos and receipts.
Clause 10: do you have to "book" your own unit?
Many owners never think about this until the first Chinese New Year they want to come home — and find the calendar full, or the company saying "book at market rate".
Fair wording: the owner gets a number of nights a year (14 is common), gives 30 days' notice, and the company blocks the calendar; no room charge, but the checkout cleaning is charged at cost because the cleaner really does come. Whether peak dates (Christmas, New Year, school holidays) need longer notice can go in too.
A contract without this clause has quietly taken the whole use of your unit.
Clause 11: licence, building rules and fines — who is responsible?
The Johor Bahru licensing position is in the licence article: MySTRA is gone, council licensing is still being worked out, and the body that really decides is your building. So the contract should say:
- who deals with the JMB/MC, registers guests and handles complaints;
- when the building issues a fine (guest parked wrongly, noise, over-occupancy), who pays — reasonably, the guest deposit first, and whatever cannot be recovered follows whoever was at fault;
- what happens if the AGM votes to ban short stays — this should be a non-breach exit.
Red-flag wording is "the owner shall ensure the unit may lawfully be used for short-term accommodation" and nothing more: everything lands on you, and the company has no duty to tell you the AGM is coming.
Clause 12: when a guest breaks something, who pays?
Three layers, in order: the guest deposit, then the platform's cover (Airbnb's AirCover exists, but does not pay for everything), and only then the owner or the company.
Two terms must be defined: normal wear and tear (linen ageing, light scuffs on walls) is the owner's and cannot be charged to a guest; damage (a burnt tabletop, a shattered glass door) comes from the guest deposit with photos. The contract should oblige the company to inspect and photograph after every checkout; otherwise there is no evidence when a claim is needed.
And ask one more question: does the company hold public liability insurance? If a guest is injured in the unit, who answers? Most owners have never asked.
What do you do with these 12 before signing?
Photocopy the contract and find each of the 12. For each one you find, check whether it reads like the fair column or the red-flag column. For each one you cannot find, ask for it to be added before you sign. A company willing to put all 12 in writing is not necessarily the cheapest, but when something goes wrong you have words to point to.
Our own contract is not perfect on every line — clause 6 and the 90% plan's three-year term are the two we have been upfront about above. But we can answer all 12. If you want to hold our contract against this list, leave your unit details at /ownerenquiry and we will send the plans and the contract terms together, whichever part of Johor Bahru your unit is in, or Desaru.
This is a checklist drawn from operating experience, not legal advice. Have a lawyer read the contract before you sign, especially the deposit, exit and liability clauses; licensing and tax rules follow the local council's and LHDN's current announcements.