In Cherry Home Association v Baker, an unpublished Michigan Court of Appeals opinion, the developer of a subdivision of 531 lots included a covenant limiting use of the land to residential use. When several owners began listing their residences on vacation web sites for short term rentals, the homeowners association filed a lawsuit seeking an injunction prohibiting the rentals. The defendants contended both that the rentals were consistent with the residential use restriction and that the restriction had been waived. After a bench trial, the trial court entered an injunction prohibiting rentals for a term of six months or less. The defendants appealed.
The appellate court found, after reviewing the state of the current law, that short term renters did not establish the type of premanence needed to establish residential use. It also affirmed the trial courts finding that the restriction had not been waived based upon testimony that prior short term rental had been infrequent and casual, and had not significantly increased until the advent of online rental platforms.
A prior decision regarding short term rentals and covenants was discussed on this blog here.