Owners and renters of Airbnbs, Vrbos, and other vacation rental homes achieved a small victory on June 5, 2020 when the Michigan Supreme Court issued Order No. 159874. This order is in response to Plaintiff Susan Reaume’s appeal of the Township of Spring Lake’s zoning ordinances and denial of a short-term rental license preventing Reaume from using her property as a short-term rental. This order affirms in part and vacates in part the Michigan Court of Appeals’ opinion.
Initially, the Michigan Court of Appeals found that under the language of the Township’s zoning ordinances, short-term rentals were not allowed in the “R-1 Low Density Residential” zoning district as these houses were defined as single-family dwellings. The Court noted that the language of the ordinance prohibited transitory or any temporary relationships and excluded transient and temporary rental occupation.
The Michigan Supreme Court vacated this part of judgment explaining that the Court of Appeals misunderstood that the “transitory” and “temporary” language of the ordinance applied to the relationship of the people and not the occupancy of the property.
However, the Michigan Supreme Court still affirmed the Court of Appeals decision because, under the language of the ordinance, Reaume’s property fit the ordinance’s definition of a “motel.” The ordinance does not allow motels in that zoning district, so short-term rentals are prohibited. While this may not seem like a win for vacation rental homeowners, the definition of “motel” in this particular ordinance is very broad and is inconsistent with the common definition of a motel that may appear in other ordinances. Even in this case, Justice Bernstein dissented from the Court’s opinion and stated that this property should not be considered a “motel.”
Property owners interested in or currently operating a rental property through Airbnb, Vrbo, or on their own should contact an attorney to review their local zoning ordinance to determine if such short-term rentals are permitted. In addition to local zoning ordinances, you should also review sub-division by-laws, condominium master deeds, and deed restrictions, which may also limit short-term rentals.
The full text of the Michigan Supreme Court Order can be found at: https://courts.michigan.gov/Courts/MichiganSupremeCourt/Clerks/RecentCourtOrders/19-20-Orders/159874%202020-06-05%20or.pdf
