When Vacation Rental Property Changes Hands in NC

By
Real Estate Agent with Sun Realty NC

 The full language of the North Carolina Vacation Rental Act (NCVRA) can be found in Chapter 42A of the NC General Statutes.  NC doesn’t want to destroy the industry and they must protect your constitutionally derived right to own property and your liberty to use it for your maximum investment. The statute is direct, simple, and targeted for just exactly what NC vacation rental investment properties are and how we utilize them.  It protects us from restrictions imposed on other lodging facility/business types (b&b’s, inns, and etc.) and doesn’t saddle us with the legalities and consequences of long-term leases.  It holds landlords/owners to ethical and sound business practices that are not difficult to conform to. Here are a few things that you might not know about operating a vacation rental in North Carolina:

  1. Your agreement must state that it is covered by the Vacation Rental Act.
  2. If a mandatory evacuation is ordered you must refund the renter's money, unless the renter refused rental insurance and/or purchased rental insurance that covers evacuations.
  3. All moneys that you collect (rent, deposit, etc) must be put into a bank account in NC that is separate from your personal account, and the address of this bank must be provided in your agreement.

Below is additional information about rentals as it pertain to vacation rental investment properties in the Outer Banks of NC…when vacation rental property changes hands (IE: SOLD) with reservations pending. Both the Buyer and Seller have specific responsibilities under this act which include, but are not limited to, the following:

1. The Buyer of residential property that is in a weekly rental program must honor all existing vacation rental leases, which end no later than 180 after recordation of the sale.

2. Prior to entering into any contract of sale, the Seller shall disclose to the Buyer the time periods that the property is subject to a vacation rental agreement. NOTE: This is usually done by the addition of a Vacation Rental Addendum, attached to the contract paperwork. The addendum notes the time period (IE: January thru December 31st of the current year), the name, address and phone number of the property manager and also a place for the Buyer to check whether they would like the Seller to continue accepting rentals after the effective date of the contract (this does not include reservations already in place, rather the entering into of any additional rental agreements after the contract has been accepted by all parties).

3. Within 30 days of the recordation of the sale, the Seller (done by the property management company) shall transfer all advance rent paid by the tenant and the portion of any fees remaining after lawful deduction to the Buyer and notify the tenant by mail of such transfer and or the Buyer’s name and address.

4. For vacation rentals that end more than 180 days after the recording of the property transfer, unless the Buyer has agreed in writing to honor the vacation rental agreement, the Buyer shall, within 30 days, transfer all advance rent paid and the portion of any fees remaining after lawful deduction of the tenant.

The Vacation Rental Addendum, Form 2A-13 (used when the property is subject to vacation rental agreements covered by the NC Vacation Rental Act) is attached to the Offer to Purchase and Contract (OTPC).  PLEASE NOTE: Sometimes out-of-area mortgage lenders will not lend money for properties that require the Vacation Rental Addendum to be attached to the OTPC.

SUMMARY: The NCVRA requires the Seller of any vacation rental property to be prepared to forward any advance payments to the Buyer of the property within 30 days of closing.  NCVRA also addresses contracts, notification of reservations already on the books, hurricane refunds, “fit and habitable” issues, evictions and advance payments already disbursed to the Seller. There’s a lot to know and understand, remember your REALTOR® and your licensed property manager can also help answer any questions.

 

 

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I strive to be your one-stop-shop for all that is happening in world of real estate and in our very own little oasis of the Outer Banks of North Carolina. I invite you to become a fan of our Facebook page (https://goo.gl/9HGocw ), post your comments, ask questions...start a conversation!

If you are considering buying or selling in the Outer Banks, please contact me today at 252-489-8491. Should you have any questions or would like to discuss your unique situation regarding real estate in the Outer Banks of North Carolina, then please call or email me today.

 

Got questions?
Ask! 
hughwilley@sunrealtync.com or 252-489-8491
Hugh "Scooter" Willey
www.nagsheadhomes.com 
www.hughwilley.obxwhere.com
www.outerbankshomes4sale.com 

 

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