Q: Sold vacation rental property and new owners don't want to honor all reservations
We sold a vacation rental property in NC. Contract showed all reservations through 2023 would be honored. We provided the realty company a list all reservations 5 days before settlement. They failed to share these with the new owners until 5 weeks after settlement. New owner now refuses to honor a silent auction week, even though that was on the original list we provided and we were told they would honor. New management company spoke with silent auction guests and confirmed their reservation with them, but told them they didn't need to sign a lease. Because of this the new owner said he doesn't have to honor the reservation because the new property management company never had the guests sign a lease. Is this correct? Can the new owner pick and chose what reservations he wants to honor after the fact?
The buyer may have the right to choose which reservations to honor, depending on various factors. For example: Did the seller provide rental dates before entering into the contract? Did the seller provide names, addresses, and a copy of the leases within 10 days of the transfer? Were the leases "standard" leases? Were the rental periods scheduled to end within 180 days? Did the seller and the buyer use the same broker? An attorney would need some specific facts to be able to thoroughly assess if/when the buyer may refuse to honor pre-purchase reservations.
Also, in some cases, the broker may be the liable party. A knowledgeable attorney can help assess each party's rights and responsibilities.
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