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Coronavirus COVID-19 and Refunds for Topsail Island Beach Rentals - Insurance Problems and "Foreseeable Events" - Welcome to Topsail Island

Coronavirus COVID-19 and Refunds for Topsail Island Beach Rentals – Insurance Problems and “Foreseeable Events”

Today someone asked me “Can I get a refund for a house I rented on Topsail Island?”

It depends.

  • Most homeowners are going to “do the right thing” and provide a full refund.
  • Some agencies are providing refunds during April while we have Stay at Home Orders here in North Carolina.
  • Some of the insurers are making ridiculous claims and you will need to take them to small claims court or sue them in an effort to get your refund.

We will talk about May and June in a moment. For now let’s start with April..

April 2020 – No Vacation Rentals at Topsail Island:

Town of Topsail Beach, Surf City and North Topsail Beach are 3 different towns (read: Topsail Beach vs Surf City vs North Topsail).

For the most part… Topsail Island is basically closed for April 2020.

Most rental agencies that I have heard from are providing refunds for this abrupt shutdown.

Here are the details:

  • The Town of Surf City has declared a discontinuation of Vacation Rentals from March 25 through April 23. All rental agencies and property owners that rent properties within the Town of Surf City are instructed to have all current renters, with a rental period of less than 3 months’ duration, and their invitees vacate the premises and leave the Town no later than 2:00 p.m. on Wednesday, March 25, 2020. Effective immediately, there will be no new rental occupancies of a duration less than 90 days allowed within the Town. Full details.
  • The Town of Topsail Beach has declared a discontinuation of Vacation Rentals from March 23 through April 22. Full details.
  • The Town of North Topsail Beach has declared a discontinuation of Vacation Rentals from March 28 through April 25. Full details.

North Carolina Beach Rental Refunds and COVID-19:

It’s that time of the year again, but North Carolina Atlantic Coast property owners have come to a screeching halt in their preparations for beach vacation season. Of course, that’s because it’s also COVID-19 season, and beaches are being shut down by local governments. Vacationers who have rented properties on Topsail Island have been hit hard by these closings. They’ve paid in advance to reserve those rentals, and now, it seems as if the entity that they paid will refund only little or none of that money.

The Deadline:

It seems as if vacationers who have paid in full or placed substantial deposits on Topsail Island rentals  are being told by agencies that refunds aren’t available for renters who paid deposits after January 29, 2020. Consumers don’t know whether that information or disinformation was placed by insurance companies or not. The date seems arbitrary, capticious and premature for purposes of foreseeing that the COVID-19 virus would spread from China to the North Carolina Atlantic Coast at an accelerated pace.

The Foreseeability of COVID-19:

Foreseeability is a legal issue that is usually addressed in personal injury cases, but it also arises in contract cases. North Carolina beach vacation renters are being told by rental insurance companies that if they purchased renter’s insurance, they wouldn’t be compensated for their losses if they purchased that coverage after January 29, 2020, because the proliferation of COVID-19 was a foreseeable event.

What is a Foreseeable Event in the Law of Contracts?

Foreseeability in contract law looks at whether a loss was within the contemplation of the parties at the time that they entered into a contract. That is a matter of the facts surrounding each individual alleged breach. When a North Carolina beach rental contract was entered into is pivotal in determining foreseeability.

North Carolina Beach Closings

Remember in the movie Jaws when the mayor of Amity Island didn’t want to close the beach even though there was strong evidence of shark attacks? The beaches on Topsail Island, NC have now been closed because of COVID-19, and other beaches on the North Carolina coastline are closing rapidly. These closings are all the result of attempts to contain the spread of COVID-19.

Vacation Rental Legislation

The North Carolina Vacation Rental Act contains provisions in connection with residential vacation rentals, but under the circumstances of COVID-19, beach and other anticipated closings, those provisions aren’t sufficiently detailed. In the context of refunds, the Vacation Rental Act appears to turn on hurricanes as it only addresses a tenant’s right to a refund during mandatory evacuations when the renters are unable to legally occupy the premises. If appropriate insurance was offered by the landlord, there is no obligation for a landlord to refund a deposit, regardless of whether the tenant elected to purchase that insurance. If a tenant can’t occupy a rental premises for reasons other than a mandatory evacuation order, the landlord need not refund any part of a deposit or rent. As the statute fails to define what an evacuation is, any COVID-19 beach closing order would appear to go as far as the tenant’s front door. Unfortunately for the tenants, they’re renting the private premises and not the public beach.

Matters don’t look too promising for the closed beaches opening again in the near future. Expect people to look to North Carolina’s small claims courts for relief. Those are the courtrooms where the issues surrounding the law of contracts and foreseeability will be addressed. At the moment, it is impossible to tell what will happen tomorrow, let alone this summer.






One response to “Coronavirus COVID-19 and Refunds for Topsail Island Beach Rentals – Insurance Problems and “Foreseeable Events””

  1. Len Avatar

    Update: Many of the rental agencies are now offering guaranteed refunds if there’s a gov ordered closure of the beach. If it isn’t on their site, email them about this.

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