Since purchasing it in January, Fripp Island Resort’s new owners changed some of the ways rentals operate and how guests experience the resort. These policy and rule adjustments are getting backlash from some and praise from others.
The resort is exercising its ability to purchase multifamily properties ahead of other buyers and asking all renters to pay fees previously only paid by those renting through their system. They’ve said they have the right to require vacation rental exclusivity — only allow rental access through their own booking portal and not other agents — spurring a reaction from a group called Fripp Forward LLC, who say they can’t do that. The resort hasn’t tried to enforce it yet, but if they did it would take away 100% of business for some independent property management companies.
When the Seascape Hospitality Group purchased the resort, a spokesperson said only about 20% of renters used the resort reservation program. This requirement would increase that number to 100%. Former Sequoia golf executive Joe Guerra and Express Oil Change and Service Center owner Adam Fuller founded the ownership group.
“There are these little communities throughout South Carolina and they’re little kingdoms. They each have their own internal set of laws, covenants restrictions and declarations,” Fripp Forward lawyer Ian Ford said. “People are trying to figure out what are the rules. Somebody new is here in the ecosystem, what rules apply?”
Ford has worked with communities in South Carolina for about a decade and said that there hasn’t been any legal action between Fripp Forward LLC and the resort.
Many of the changes either directly or indirectly give incentives to homeowners to rent through the resort, a shift towards the new owners having more control over real estate on the island, whether they own it or not.
It’s a move some are happy about and others aren’t.
“Fundamentally, a lot of people don’t like change,” resident Don Peel said. Peel also owns a building and renovation company that specializes in Fripp Island homes. “However, I do believe that the vast majority of people on Fripp Island are pleased with the new owners.”
The new management has also been re-painting, re-building and repairing many of the resort’s facilities including their pools and restaurants.
“We’re looking at trying to expand our season,” Chief Operating Officer John Scappatura said. He was hired in January when the new owners bought the resort. “There’s a lot of people who may not come here during the colder months because the restaurants have all generally been closed or the stores have been closed and we’re trying to figure out how to make this (a year-round resort).”
If Fripp Island Resort enforces rental exclusivity businesses like “FrippVacation” or “4RentonFripp,” which are named after the island and broker rentals there won’t be able to anymore, potentially devastating their businesses.
Instead, the resort claims Fripp Island covenants say the resort has the right to require all rentals to go through their booking portal. In a letter to members they state that other communities like Sea Island, Kiawah Island, Reynold Lake Oconee and The Cliffs exercise exclusive rights.
Fripp Forward LLC, and its lawyer, Ford, say the covenants don’t.
“We haven’t seen anything (that) allows exclusivity,” Ford said.
“4RentonFripp” declined to comment.
NALU Paddle Boarding
Following the resort accusing them of violating their lease, NALU Paddle Boarding, a water sports equipment rental service, is leaving Fripp Island June 6 after 11 years.
Owner Ben Field held a protest in front of his shop in the Marina last month and made statements saying that the resort was trying to bully them off the property. He said in a speech that in the past 11 years they’ve never had problems with previous owners.
The resort responded with a letter saying that NALU defaulted on several terms of their lease including a failure to require guest cards for all customers, being open for business at agreed-upon times, unauthorized use of trademarks and trade names, and modifications to the leased premises without the landlord’s permission. In his speech Field denied violating the lease.
Both parties declined to comment on the resolution after their settlement last week, citing a non-disclosure agreement.
Scappatura estimated they retained ongoing business relationships with 90% of the vendors inherited and over 98% of the employees inherited.
The resort took over Fripp Ship, a gift shop on the island, and the former owner now only operates Mango’s Island Gifts & Apparel at the front of the island. Scappatura said the resort also discussed moving a hair salon to make way for other opportunities.
“That could be eventually a perfect spot for an expanded restaurant or bar that’s right there on the beach,” Scappatura said. “We don’t have any intention for her to go anywhere, just maybe not in that spot.”
While previously only those who used Fripp Island Resort’s rental system had to pay an added resort fee, now all members who rent out their property must pay that fee.
It’s an added 12.8% charge, which translates to hundreds or thousands for some, that goes towards maintaining and improving the resort. For a home that rents for $2,000 a week, that’s about $250 extra a week.
Barry Hassett purchased a home on Fripp Island in 2021, and when he and his family aren’t staying there they rent it out through Fripp Island Resort’s system. He said he believes it’s fair everyone pays the fee because regardless of whether they use the resort’s rental system, they’re using the facilities.
This fee typically gets passed on to the visitors renting the property.
“My guests have paid that resort fee since day one,” he said. “I’ve never found it to be a hindrance to rentals.”
The new owners are also now requiring multiple memberships for owners of multiple properties whereas previously owners only needed one membership regardless of how many properties they owned.
Rental Card enforcement
The new management is also enforcing the guest card policy more strictly, according to emails sent out to members.
For those 13 and older, they require guest cards to use their amenities including pickleball, pools and bicycle rentals.
If a homeowner rents through the resort, the guest cards are included in the 25% management fee they pay to the resort. If they don’t rent through the resort guest cards must be purchased separately for about $50 a week during high season, according to Hassett.
First right of refusal
For those selling their multi-family home on Fripp Island, the resort gets the first crack at purchasing the property.
“We have exercised that in a few cases, but a very small (percentage), maybe 10% of the ones that came available,” Scappatura said.
Once there is an offer from another buyer Scappatura said the resort has 15 days to decide whether they want to purchase the property or not at the offered price. However, he said the slowest they’ve gotten back with their refusal or decision to purchase was 48 hours. They don’t have this right for single-family homes.
“If you have to wait 15 days, (it’s) a long time for you to start your process,” he said. “If they get back fast, now (that) you know that we’re not interested in the property, you can finish your offer and purchase your home right away.”
Scappatura said they’re using the properties to put up contractors or management’s family members looking to see the resort for the first time, and it’s possible they use them as rentals in the future.