A Florida appellate court recently held that a property owner’s use
of their home as a short-term vacation rental did not violate the association’s
restrictive covenants which contained language restricting the properties
use to residential purposes and prohibiting their use for business purposes.
The Court interpreted the restrictive covenants strictly to arrive at
this conclusion.
In this case, the homeowner owned two beach front properties subject to
restrictive covenants. The restrictive covenants specifically provided
that the properties
shall be used only for residential purposes...and not for
business purposes. The homeowners routinely rented out their properties as vacation rentals
on Vacation Rentals by Owner (VRBO), however, in December of 2015, they
received a letter from the association stating that the association had
observed that the primary use of their properties was for vacation rental
and concluded that they were violating the restrictive covenants.
The association filed a complaint for declaratory judgment against the
homeowners alleging that their use of their property violated the restrictive
covenants. Specifically arguing that by renting out their properties as
vacation rentals, they were using their property for a business purpose
and not a residential purpose. The trial court agreed with the homeowners
and dismissed the case. The association appealed.
On appeal, the Appellate court held that restrictive covenants are to be
strictly construed, stating that the restrictive covenants at issue in
this case did not mention anything about vacation rentals, or that the
homeowner’s use of their properties as vacation rentals would constitute
a prohibited business purpose under the restrictive covenants. Further,
the Appellate court stated that “even if the restrictive covenants
were susceptible to an interpretation that would preclude short-term vacation
rentals, the
omission of an explicit prohibition on that use in the covenants is fatal
to the position advocated by the association because to impute such a
restriction would cut against the principal that
such restraints are not favored and are to be strictly construed in favor
of the free and unrestricted use of real property.”
Property should not consider this case applicable to all situations since
not all covenants are the same. In addition, in light of this decision,
associations may take steps to amend their covenants to prohibit vacation
rentals. It would prudent to consult with legal counsel before engaging
in vacation rentals in a home covered by restrictive covenants.