Problem 1: Our Hurricane Evacuation Policy

Make no mistake… our hurricane policy was really born in October 2018 because it was from that point on that we began enforcing the new rule.

Our management will tell you that we’ve always had a hurricane evacuation policy, and that’s technically true. Our “Rules and Regulations” have had an evacuation policy as far back as we have published records, but it was put there for one reason: to establish liability. What’s important is that the rule was never enforced until after Hurricane Florence, and just like jaywalking, a law that’s never enforced is not a law at all.

In October 2018 the Board changed the rule to add the following language: “If a boat is not removed from the marina during a Tropical Storm or Hurricane, the slip owner will be assessed a $500 fine and be responsible for any damage done to the marina by that boat.” From that point on the Board began assessing fines.

Make no mistake… our hurricane policy was really born in October 2018 because it was from that point on that we began enforcing the new rule. How did that new rule go over with the owners? You tell me. Here are seven excerpts taken directly from the Minutes of Board meetings:

“Mark reported that one owner has refused to sign the Rules & Regulations because he does not agree with them…”

“Mark and Jim reported on feedback from the letters sent to 15 slip owners who had a boat in their slip during Dorian, and who were issued $500 fines.”

“Dorian $500 fine response: Mac reports that we have received written follow-up from four owners with various requests for waiver of the fee, and Jim and Mark report one additional verbal follow-up.”

“There are currently 4 slip owners who have not paid the $500 fine for leaving a vessel in their slip during Dorian. They will be notified that a late fee will be assessed.”

“There were 12 boats left in the marina during Isaias, and they will be notified that the $500 fine will be due…”

“Jim discussed a letter he had received from a concerned slip owner about the policy of boats being required to leave the marina during named storms.”

“[Jim] read a letter from a slip owner who has been fined $1000 for a tenant’s boat that was left in his slip during two storms..."

So far, at least twenty-seven $500 fines have been levied! At least one owner was fined twice. It would be interesting to hear details about that “feedback” from the owners.

Now let’s take a look at what happened to our turnover rate after the Board unilaterally (and without a referendum of the owners) established this highly unpopular new rule. From that point forward turnover rates have gone straight up.

If you’ll notice, for nine years we had been averaging a 3.1% turnover rate (actually below the “normal” rate which is 5%). We even had one year in 2017 when not a single slip sold. Everyone was happy with their investment. But after our new hurricane evacuation rule, from 2018 to 2021 turnover has gone straight up to almost five times our previous average -- all since implementing our new policy! Meanwhile all the other marinas have continued to stay at or below the norm.

This new policy caused people to flee the marina for several reasons. First, many of our owners live several hours away. The twelve hour deadline to move their vessel is simply not possible for those members. More importantly, all boat owners are required to carry liability insurance to protect the marina against any damage that might be caused by their vessel, so when you get right down to it, our evacuation policy is really a solution in search of a problem.

This well-intentioned yet ill-founded policy was passed while we were still reeling from the damage of Hurricane Florence and while the infamous Rabid Rabbit still sat atop A-dock making our marina the focus of both local and national media. That exposure pressured us into making an awful decision, and though Rabid Rabbit was eventually towed away, that bad decision still haunts our marina. If there’s one thing I’ve learned from forty years in the business world, it’s this: Never make an important decision under duress or you will live to regret it.

Besides causing a five-fold increase in our turnover rate and besides being wildly unpopular, our evacuation policy is a public relations disaster. The fact is we’re the only major marina in the entire area with this policy. And this policy communicates to the public -- not to mention our competition -- that Oriental Harbor must be extremely “unsafe” to be the only marina with such a policy. If you don’t believe our competition is using this against us, I suggest you shop around and mention to them you are considering Oriental Harbor.

You’ll hear over and over about how unsafe our marina is. The fact is our marina is actually safer than most of the older marinas when it comes to surviving a hurricane. One competitor, Pecan Grove Marina, who likes to brag about how safe they are and how dangerous we are, had two boats blown completely out of their marina and into a nearby field during Hurricane Florence.

Please understand, I don’t believe the Board intended this policy to adversely impact property values. I think that was just the unintended consequences, but regardless, the result is the same. And we have to fix it. But setting aside the obvious adverse impact on our property values, it’s a bad rule to begin with, and here’s why.

First, international maritime doctrine going back centuries has always upheld “safe harbor” law. “A right to enter and remain in a safe harbor without prejudice, at least in peacetime, when required by the perils of the sea or force majeure is universally recognized." (Paragraph 3.2)

“Under international law, no port may be closed to a foreign ship seeking shelter from storm or bad weather or otherwise compelled to enter it in distress, unless another equally safe port is open to the distressed vessel to which it may proceed without additional jeopardy or hazard.” (Paragraph 3.2.2)

Besides the international and federal safe harbor laws, there is state precedent as well. Although most coastal states don’t currently have their own versions of “safe harbor” laws, Florida, the state with the most hurricanes and highest percentage of its border being coastline has the following law regarding marina evacuations:

“Marinas may not adopt, maintain, or enforce policies pertaining to evacuation of vessels which require vessels to be removed from marinas following the issuance of a hurricane watch or warning, in order to ensure that protecting the lives and safety of vessel owners is placed before interests of protecting property.” (Florida Statutes, Title XXIV, 327.59)

But besides the adverse impact on our property values, and the probable illegality of this policy, there’s still another reason that makes this policy a really bad idea. It exposes all of us slip owners to massive liability. Here’s how: Suppose after being forced to evacuate, a vessel was to sink or damage another boat or property. Our marina’s hurricane policy would be the “proximate cause of the loss”. God forbid there was a loss of life.

Don’t think for a second that the liability would end with the marina. Any good tort attorney would not only sue the Association but would also name each individual slip owner as a joint defendant. North Carolina law does not apportion fault between defendants found to be jointly and severally liable. In other words, each defendant can be held independently liable for the full amount of a plaintiff's damages, regardless of their respective degrees of fault.

So slip owners with the highest net worth have the greatest exposure. Liability would not simply end with the Board Members who implemented our mandatory evacuation policy. And you can bet that if such a lawsuit were ever to be brought, we would lose. It would be very difficult if not impossible for any court to see it our way when our policy clearly violates international, federal, and state precedents.

I don’t want to be an alarmist but this case would be a virtual slam dunk for any plaintiff’s attorney. The legal threshold for proving proximate cause is simply that the damages were “reasonably foreseeable”. That’s all. Well duh! A hurricane is coming and we sent them out into the storm. What could possibly go wrong?!

And if that’s not bad enough, our own minutes and the hurricane evacuation policy itself declares the reason for the rule is to protect the marina from damage. In other words, we fully anticipate damages. That sounds like “reasonably foreseeable” to me. The fact is we’d lose and we’d lose huge. Still not convinced? Okay, how about this?

Bear Point Marina on the gulf coast of Alabama learned this lesson the hard way during Hurricane Michael in October of 2018. One boat owner, forced to evacuate, lost his million dollar custom-built sailboat out in the gulf. His insurance company paid to replace his boat but then they sued the marina whose evacuation policy was the proximate cause of the loss. The marina had to write a $1.4 million check.

Please understand, I’m not against protecting our marina. I personally think we should replace the mandatory evacuation policy with a clear “evacuation recommendation” and maybe even a requirement to carry twice the liability coverage if an owner chooses not to evacuate. That protects us without exposing us.

I believe that we can protect our marina without destroying our property values, without creating a public relations disaster, and without exposing our marina and our owners to liability under a proximate cause lawsuit. In summary, I believe this policy has to change and it has to change as soon as possible. We simply can’t turn our values around until we change this policy. Now let’s look at the next problem…

Go to Problem 2 >>>