Patrick and James are being sued for the amount the processor had to refund to the 200 (+-) people who had used a credit card to make a vacation rental deposit within 60 days of the card holder's complaint (you have to complain within 60 days of the transaction to be eligible for a charge-back).
The article states that amount is $352,598.41 (wow! that's precise, eh?).
If the report that the escrow account was short $838,000 is taken at face value, and if at least $700,000 (+-) was guest deposits, then 485,401.59 (+-) worth of guests were SCREWED. If the average deposit was $1200 (+-), that means that 404.5(+-) people lost their money.
Now, changing the law is a great idea, but let's be realistic: Some Tennessee rental companies are DEEPLY in to their no-interest-no-set-payback escrow accounts.
Deep. Deep. Deep.
Nobody is stopping them. It isn't against the law in Tennessee to close your doors and ignore the people who paid money for a deposit against a future rental.
There is NO way those cabin rental people are going to allow a law to pass that requires them to bring their escrow accounts UP to being only one-third short. Of this, i am pretty sure ~ given the nature of the Tennessee legislators and their love of
Let's face the fact that the Tennessee Real Estate Commission is tired of dealing with the errant rental companies (i'm sure the real estate agents are tired of the vacation rental people getting preferential treatment).
Let's dump the whole shebang in the lap of the Tennessee Department of Consumer Affairs. Let's have an Act of law called the Tennessee Vacation Rental Act. Let's be plagiarizers and copy the North Carolina Vacation Rental Act. Word for word. Especially this part:
§ 42A-16. Advance payments uses.
(a) A landlord or real estate broker shall not disburse prior to the occupancy of the
property by the tenant an amount greater than fifty percent (50%) of the total rent except as
permitted pursuant to this subsection. A landlord or real estate broker may disburse prior to the
occupancy of the property by the tenant any fees owed to third parties to pay for goods,
services, or benefits procured by the landlord or real estate broker for the benefit of the tenant,
including administrative fees permitted by G.S. 42A-17(c), if the disbursement is expressly
authorized in the vacation rental agreement. The funds remaining after any disbursement
permitted under this subsection shall remain in the trust account and may not be disbursed until
the occurrence of one of the following:
(1) The commencement of the tenancy, at which time the remaining funds may
be disbursed in accordance with the terms of the agreement.
(2) The tenant commits a material breach, at which time the landlord may retain
an amount sufficient to defray the actual damages suffered by the landlord as
a result of the breach.
(3) The landlord or real estate broker refunds the money to the tenant.
(4) The funds in the trust account are transferred in accordance with G.S.
42A-19(b) upon the termination of the landlord's interest in the property.
(b) Funds collected for sales or occupancy taxes and tenant security deposits shall not
be disbursed from the trust account prior to termination of the tenancy or material breach of the
agreement by the tenant, except as a refund to the tenant.
(c) The tenant's execution of a vacation rental agreement in which he or she agrees to
the advance disbursement of payments shall not constitute a waiver or loss of any of the
tenant's rights to reimbursement of such payments if the tenant is lawfully entitled to
reimbursement. (1999-420, s. 1.)
YES! Let's put it in writing and make it a law that a guest of a Tennessee vacation rental company is entitled to a refund ~ even if the company closes their doors.
These poor screwed people would then at least have a leg to stand on when it came to using the courts to get a refund (i heard one fellow lost $7,000 at Hickory Mist, being double-whammied because he had paid his deposit early and by check).
Hello? Is anybody listening?