Customers get refunds from Outer Banks vacation rental company at center of state investigation

OUTER BANKS, N.C. (WTVD) -- An Outer Banks rental company under investigation by the state for not offering refunds for beach rentals amid COVID-19 is changing its tune.

A representative with Surf or Sound Realty said, "We began the refund process for guests affected by the Dare County road closure who did not transfer their reservations to later this year or to 2021. We have been in contact with these guests and are working to provide refunds as quickly as possible. In fact, they should be receiving their refunds within a week of us receiving their signed agreements. We understand this has been a frustrating situation for all and we apologize for our part in it."

Troubleshooter Diane Wilson first heard from the frustrated customers of Surf or Sound Realty earlier this month. More than 50 families said they are owed refunds that total more than $80,000.

When COVID-19 cases began to rise across North Carolina, Dare County closed off access to all visitors from March 4 through May 15.

Surf or Sound originally said they would refund customers who didn't have access to their vacation rental during the road closures, but, once restrictions were lifted, the rental company changed its mind, only offering credit forwards a future rental.

RELATED: Outer Banks rental company at the center of dozens of refund complaints responds to ABC11

This stance by Surf or Sound Realty prompted an investigation by the North Carolina Real Estate Commission and North Carolina Attorney General Josh Stein's office.

"If you have a contract that cannot be performed, it's not a contract, and you're due your money back," Stein said. A class-action lawsuit was also filed against Surf or Sound for refusing to refund customers.

Surf or Sound alerted the Attorney General's office that it wanted to avoid litigation with their office and would refund customers who were impacted by COVID-19 restrictions.

"At Surf or Sound Realty, the interests of both homeowners and guests are top priority," a representative for the rental company said. "Over the past few months, we have been working tirelessly to find appropriate solutions that would serve the interests of our clients--those homeowners who count on rental income for their properties, and our guests--those who help support the Hatteras Island community by visiting year after year. During this unprecedented time, it's been challenging to create fair compromises for all involved. And, our intent has always been to find an acceptable resolution for each and every individual."

In response to Surf or Sound agreeing to refund customers, Attorney General Stein said, "I am pleased that we were able to achieve this result for consumers without a lengthy court battle. Would be vacationers who were prohibited from traveling will be refunded. This is the right outcome."

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