Dear OBAR members,
Our association has alerted the North Carolina Real Estate Commission (NCREC) to negative industry and consumer impacts posed by Online Travel Agencies’ management of rentals in properties undergoing sale. OTAs currently lack the capability to substitute buyers for sellers as the recipients of income from rentals booked for a property in advance of a transaction. This necessitates a variety of problematic methods to facilitate buyers’ receipt of the rental income. It is OBAR’s understanding that following methods are currently employed by OTAs and/or members to resolve this issue:
- The OTA cancels the seller’s subscription and all associated bookings, creates a new subscription for the buyer, and notifies booked tenants they must rebook with the buyer. This violates the Vacation Rental Act where bookings elapse within 180 days of recordation and requires the buyer’s retention of the OTA as the rental agent.
- An attorney prorates the income due the seller from booked rentals and advance payments including security deposits. This is difficult and expensive to accomplish and often frustrated by buyers’ unwillingness to advance an entire rental season’s income.
- An attorney arranges for automatic transfer to the buyer of rental income the OTA deposits in a seller’s account throughout the season. This provides an insufficient guarantee for many buyers.
- To advance a regulatory and/or legislative solution, OBAR needs to provide NCREC firsthand accounts exemplifying related impacts on transactions and consumers. If you have been involved in a transaction where an OTA has cancelled bookings, or where a sale was undermined or delayed by problems with an OTA, please contact me at (202) 507-2564, or email@example.com.
Porter Graham | Local Government Affairs Director
North Carolina Association of REALTORS®
4511 Weybridge Ln | Greensboro, NC 27407