Families out thousands of dollars after OBX realty company denies refunds

Posted at 3:41 PM, Jun 03, 2020
and last updated 2020-06-19 10:57:09-04

OUTER BANKS, N.C. - Virginia Beach resident Heidi Doyle said this is the first year her family won't be vacationing in the Outer Banks.

Her family had booked a house for a week in mid-April through the Hatteras-based real estate company Surf or Sound Realty.

However, when Dare County closed to visitors in March for an undetermined amount of time, the trip didn't happen. With $3,000 already paid in full, Doyle said she tried to contact management, but couldn't reach them.

"I pleaded to them several times by email and by Facebook messenger and telephone calls, and I actually made a trip in person to the Avon office," she said.

After what she called "quite a few tries," she heard from the company through an email that said they would be refunding customers for the week that they weren't able to go on vacation. They were told not to expect the refund process to begin until after the last day of their booked stay.

Doyle said "fast-forward to April" when she received and email from Surf or Sound that read, "We'll contact you as soon as your refund is processed via email."

When she spoke with News 3 on June 2, she said she still hadn't received any updates despite trying.

George Bivens is from Pennsylvania and had a May beach wedding planned. He said they booked the house in January and had family and friends book nearby as well.

He said when he first learned of the Dare County access closure in March, he tried to contact the company, and "they were a little bit hard to get a hold of, but after a couple of attempts I got a hold of them and they explained that they were running with limited staff and everything, so I didn’t think much about it."

Related: Pittsburgh couple feels they are being forced to hold illegal wedding in OBX

He said time passed and he also received information that if the Outer Banks wasn't open by the time the rental period was over, Surf or Sound would refund the money or they would credit it towards another rental.

"Ultimately, very recently I got an email from them indicating that they have now changed their policy and they’re not going to offer a refund," he said.

Instead, According to an email from the company, they are offering three other options:

Option #1 – Switch your spring vacation to fall 2020 and we will try to match your same rate.

We may be able to switch your spring vacation to a relaxing vacation in the fall for the same rate. Travel Insurance, if purchased, can be transferred to the new dates of stay.

Option #2 – Apply what you paid for your spring vacation to summer 2020

We have limited availability, so please act quickly if you would like to apply your payments to a 2020 summer week. Travel insurance, if purchased, can be transferred to the new dates of stay.

Option #3 – Switch your 2020 vacation to a week in 2021 in the same home

This option affords you additional flexibility if your remaining 2020 vacation time is uncertain.

After reviewing the options, Bivens said because they had planned an entire wedding and had family coming from near and far, they weren't able to take advantage of the choices.

"I emailed them and indicated that it wouldn’t work and I asked for a refund, and I have heard nothing from them in spite of many requests," he said.

The North Carolina Real Estate Commission said historically - and in this case - it is their opinion that licensed vacation rental brokers must provide refunds if the renters were affected by access closures.

In a statement to News 3,the legal council for the commission, Janet Thoren, said they have received "a number of complaints against Surf & Sound over this issue." However, since the complaints "remain under investigation, we cannot comment on them at this time."

The statement went on to say that the commission's opinion was based on its review of the law and upon consultation with the Attorney General’s Office.

However, the attorney for Surf or Sound, Lloyd Smith, disagrees. He outlined his reasoning for disagreeing in a four-page letter to the NCREC.

In a phone interview with News 3 reporter Erin Miller, he said, "It is simply two opinions. We take the opposite position. This closure wasn’t an act of God; it was a political act, and only three counties out of the 100 counties in the state of North Carolina issued a non-resident restriction for entering."

In his letter to NCREC, he cited that North Carolina courts have stated, "landlords are not liable for the independent actions of the government" and that governmental interference usually releases the landlord/broker from refund responsibility.

He said by offering the other options, "our client is really trying to accommodate people even at a loss to itself and any future stays."

On the flip side, renters are standing together. They have created a private Facebook page as a way to connect and share stories. With nearly 500 members, including Bivens and Doyle, they said they are using the platform as a way to move forward.

Some have decided to hire their own attorneys and take action in small claims court. Others, like Doyle have gone to their banks for help.

Doyle said the money came from her son's trust fund left behind by his late-grandfather. She said it is outlined in the trust that she is required to take her son on a vacation every year.

"If we don't get that money back then we would be expected to reimbursed the trust so it’s really important that we either get that money back or I take him on this vacation [which can't happen at this point]," Doyle said. She's still waiting to hear what the next steps will be.

She said talking these troubles out with others online has made her feel less alone.

Bivens said that it's more than just the thousands of dollars his family lost.

"It’s a matter of principle at this point. I’m upset about the fact that they made a promise and how we’ve been treated through all of this," he said. "They should have talked to us all along, not just dumped us into voicemail and then not return calls. They needed to talk to us and, candidly, they needed to live up to the promise they made in writing and verbally when they talked to us."

In an email to the renters, Surf or Sound said in part, "After much consideration, we have decided not to issue cash refunds to guests who had reservations between the dates of 4/4/20 and 5/15/20. We are however offering a dollar for dollar credit towards another stay either this year or next year. We do apologize for the delay in arriving at this decision. There were many different factors, which all needed to be carefully considered. We realize that not everyone will be happy with our decision but we feel that it represents a fair compromise for all parties."

The Attorney General's Office said they have received 68 complaints against the company.

On June 19 the Surf or Sound Realty CEO contacted News 3 and released a statement saying:

"First and foremost, we understand the frustration felt by our rental guests as we all navigate this extraordinary time in our country. At Surf or Sound Realty, the interests of our homeowners and our guests are top priority and the COVID-19 pandemic has brought challenges never expected nor imagined.
We understand that our decisions during the Dare County road closure were confusing at times. We apologize those decisions made a difficult time more challenging for some guests.
When Dare County first issued its road closure, the CDC was recommending a two-week shutdown to slow the spread of the virus. When it became evident the road closure would be extended indefinitely, we needed to honor our fiduciary responsibility to our homeowners. We sought to find a reasonable option that would serve the interests of both homeowners and guests. And, for the first time in 28-years—began offering dollar-for-dollar transfers.
As of June 18, two-thirds of guest reservations affected by the road closure have been resolved, but that isn’t good enough. Our team is continuing daily to assist every guest who chose to do business with us. We are committed to finding a resolution for each and every individual.
We feel privileged to have represented Hatteras Island homeowners and visitors since 1978, and are committed to serving our guests, our community, and our homeowners with integrity for many more years to come."

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