Vacation Rental Refund Cases & Their Impact
June 22, 2020
Last week a court case was filed in Dare County Superior Court by Chris Bagley, an attorney with the Law Offices of James Scott Farrin. The case has only two named plaintiffs right now, but the outcome could impact many more.
The focus of the civil action is to reclaim rental charges collected by Surf or Sound Realty that paid for vacation rentals during the time that all visitors to Dare County were prohibited and access blocked by law enforcement checkpoints, which essentially canceled every mid-March through mid-May vacation that was scheduled.
Although some bought travel insurance, their claims were turned down as policies did not cover travel restrictions imposed by a governmental authority. Government actions other than mandatory evacuations due to a possible hurricane strike are not covered by policies. Travel insurance companies claim the service originated to cover acts of God and uncontrollable family emergencies. Under the current literature acts of God are limited to weather-related events and do not include or exclude pandemics.
Bagley believes the North Carolina Vacation Rental Act requires a full refund for all advance payments.
2 plaintiffs are currently involved, however over 500 potentially affected parties are speculated. Regardless of whether the person is a client or seeking Bagley’s representation, of course, this class action is asking the court to refund the money to all affected during the time frame.
While still in early development, the outcome could have a substantial impact on vacation rentals moving forward in North Carolina. Due to variances in state and county regulations regarding vacation/short term rentals, it is hard to say what impact the outcome of this case and others like it would have on vacation rentals across the US but definitely something to keep an eye on as we move through the second half of 2020.
As the industry continuously assesses the impact of COVID-19 individual cancellation policies among vacation rental management companies will need to continue to evolve, adding more specific language to safeguard against potential global events and travel bans.
