It is not unusual for homes in a subdivision to be subject to restrictive covenants limiting the owners’ use of their property to residential purposes and/or prohibiting the use of the property for commercial, trade, or business purposes. This sort of restriction can also be found in instruments such as declarations governing condominium or townhouse communities. With the increasing popularity of programs such as VRBO and Airbnb, numerous courts have recently dealt with the issue of whether these so-called short-term rentals violate these sort of use restrictions. So far, the courts, strictly construing the covenants, have been fairly hesitant to find a violation.
For example, recently in Lake Serene Property Owners Association v. Esplin, No. 2020-CA-00689-SCT, 2022 WL 713417 (Miss. Mar. 10, 2022), the Mississippi Supreme Court held that a homeowner's use of his property for short-term rentals was a “residential use” and, thus, did not violate the restrictive covenants governing the subdivision and limiting use to residential use.Read More