Attention Vacation Rental Companies: North Carolina Courts Create Reason to Review Procedures for Rental Agreements
Monday, June 26, 2023
North Carolina Vacation Rental Rules Change

Written rental agreements state the terms, conditions, and rules of a vacation home rental. 

The rental agreement may also contain important warnings and notices about the use of certain items, like elevators, pools, or hot tubs. 

Although an entire group or family will use the vacation home, the rental agreement is usually signed by only one individual, the one paying the bill.

Industry-Standard Process No Longer Offers Needed Protection

Last week, the North Carolina Court of Appeals held that the rules of a rental agreement were not enforceable against individuals who had not signed the rental agreement. 

In Jarman v. Twiddy & Co. of Duck, Inc., a minor child was injured while a family occupied a rental home on the Outer Banks.  The child's parents filed a lawsuit.  The vacation rental company asked the Court to enforce certain restrictions from the rental agreement against the parents. 

The vacation rental company acknowledged that the parents did not sign the rental agreement, but argued that they were "beneficiaries" of the rental agreement because they used the vacation home.

The Court disagreed with the vacation rental company.  The rental agreement's terms, conditions, and rules were not applicable.  The vacation rental company did not get the protections that it expected.

Review Your Signatory Procedures Now

This recent Court decision gives vacation rental companies a reason to review their procedures.  Receiving the intended benefit of the protections set forth in a rental agreement, and being able to show that occupants were provided notices and warnings set out in a rental agreement, could be very important in case of a dispute.

Vacation rental companies should consider requiring more than just one signature on a rental agreement. 

The right procedure will vary from company to company, but a few suggestions include having all adults sign or having all adults sign an acknowledgment of the rental agreement or a "term sheet." 


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