On January 12, 2023, the Michigan Court of Appeals published a binding opinion regarding short-term rentals and deed restrictions in Aldrich v Sugar Springs Property Owners Association, which involved short-term rentals within a large community in Gladwin County, Michigan that included “clusters of residential lots, residential condominium property, commercial property, recreational improvements to include areas designated for camping, and permanent green areas or other open spaces.” The community also was governed by a set of restrictive covenants that limited the use of property to “residential purposes only” and limited dwellings to single family residences. As evidenced by two recent decisions, however, the Michigan Court of Appeals has declined to adopt a more favorable position that favors short-term rental property owners and has continued to reiterate that short-term rentals violate residential, business, and commercial restrictions.Īldrich v Sugar Springs Property Owners Association, Inc. Notwithstanding this clear and consistent judicial record, property owners in communities with residential, business, and commercial restrictions who want to engage in short-term rentals have continued to take their chances with Michigan courts, hoping that the facts in their particular case will result in a different outcome. Since 2004, the Michigan Court of Appeals has repeatedly determined that short-term rentals within Michigan communities that are subject to residential, business, and commercial restrictions are prohibited because they are commercial activities that are inconsistent with residential use. Michigan Court of Appeals Holds that Short-Term Rentals Violate Residential Use Restrictions
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