Court action seeks vacation rental refunds

Published 4:32 pm Saturday, June 13, 2020

Recent travel restrictions aimed at slowing the possible spread of COVID-19 created at least one group of frustrated vacationers who want refunds on monies paid toward planned visits here.

According to Laura Brewer, communications director with the North Carolina Department of Justice, her office received approximately 60 complaints and is taking a close look at them.

Although local residents remained free to come and go, visitor access to all Dare County visitors was blocked from March 17 to May 15. A locked-down county effectively canceled every mid-March through mid-May vacation scheduled.

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Tom Stewart, chief operations officer with Resort Realty, said there was some initial confusion among rental managers on what steps to take due to the circumstances.

The NC Vacation Rental Act requires a full refund from the landlord of any rent, taxes, or any other payments made by the tenant when a mandatory evacuation is ordered except in cases when travel insurance was purchased. In those cases, the insurance company makes payment to the tenant.

Tenants who refused insurance offered by the landlord or real estate broker that would have compensated them for their losses get nothing.

However, the COVID-19 order that created the bridge blockage was not an evacuation order. Nobody was required to leave.

Unable to enter the county, vacationers everywhere started demanding refunds. Turning to the NC Real Estate Commission, property managers soon had an opinion on the situation: refund the money.

“We followed the opinion that the NC Real Estate Commission gave,” explained Bob Oakes, president of Village Realty and Management Services, Inc. “If the guests could not get there, we were responsible for refunding them. So we made refunds to all those folks. We tried to convince them to transfer to another week and the month of April was kind of miserable. Nobody was happy.”

Leading the list of disgruntled people are several hundred who contracted with Surf or Sound Realty in Avon. After notice that a refund was in the works, the company made an about face, changed its policy and said tenants could reschedule, but there would be no refunds.

Turning to their travel insurance company, the would-be visitors found their reimbursement claims were denied.

“We booked a house in Rodanthe with Surf or Sound for a week back in April,” said Jessica Somers. “The company at first said via emails there was a refund if unable to make their week due to road closures. Then for eight weeks myself and hundreds of people tried to inquire about our refunds. Now they have chosen not to refund people.”

She added that she was coming down from Maine and other family would be coming in from other parts of the world, so rescheduling for another date was not a viable option.

Somers said also that she did have vacation insurance, but her claim, like that of others, was denied.

Another would-be vacationer in a different situation is Virginia Beach resident Heidi Doyle, who booked her April week back in December

She said when the ban was put in place, she contacted Surf or Sound and asked what will happen if the ban is not lifted. The response was that nobody knows, but to be patient because she could book a different week or get a refund.

Doyle said they never got back with her other than to say in an email that she could pick another week, but there would not be a refund and her insurance did not cover this situation.

That leaves Doyle in a financial bind since the money she sent Surf or Sound Realty came from special needs trust fund set up for her son. The trust guidelines require that she use the money to take her son on a vacation every year.

“If I don’t use it for a vacation then I will have to pay the trust back, so it’s either take him on this vacation or get that money back,” Doyle said.

Banding together through social media, Somers and Doyle are part of a Facebook group with than 600 members formed by people trying to get refund from the Surf or Sound Realty Company.

More than just a gripe group, the Law Offices of James Scott Farrin was contacted and a suit was filed Tuesday on behalf of a proposed class of vacationers from North Carolina and around the country.

According to a law firm media announcement, plaintiffs say they have not received refunds for vacation rental properties booked with the company during the county’s March 17 to May 16 coronavirus-related bridge closure and that the NC Department of Justice and the NC Real Estate Commission are investigating.

Telephone calls to Surf or Sound Realty were not returned, but the attorney representing Surf or Sound Realty, Lloyd C. Smith Jr., did call and maintains that the Real Estate Commission’s opinion that tenants are due refunds from real estate brokers and landlords is incorrect.

It’s not the only time Smith has been at odds with the county. He represents Joseph E. Blackburn Jr. and wife Linda C Blackburn and all similarly situated individuals in an unrelated class action suit in Eastern District of North Carolina Federal Court against Dare County, the Towns of Duck, Southern Shores, Kitty Hawk, Kill Devil Hills, Nags Head and Manteo, filed on behalf of all non-resident property owners who lost use through the temporary taking of their property for seven weeks.

“Our first and strongest argument in this case,” said Smith, “is simply that it was governmental interference which is relevant as to who has to refund the money.

“Access to Dare County was not an act of God,” he continued. “It was instead a governmental act. Our client was prepared to deliver the property that was leased in a fit and habitable condition and the terms of the lease were broken by governmental activity.”

Smith said anyone looking for a refund should look to Dare County and the municipalities.

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