334 So.3d 1139
Miss.2022Background
- Lake Serene subdivision is subject to recorded restrictive covenants limiting use to "residential purposes" and prohibiting business uses; covenants permit tenants and tenant use of common areas but do not set rental-duration limits.
- Homeowner Clyde Esplin listed his Lake Serene house on Airbnb for stays ranging from 1–30 days; the POA (LSPOA) asserted covenant violations and threatened fines.
- LSPOA’s board adopted a bylaw (Oct. 2018) prohibiting rentals of less than 180 days, then sued to enjoin Esplin from short-term renting; Esplin counterclaimed seeking invalidation of fines and the bylaw.
- The chancery court held Esplin’s short-term rentals were a residential use, invalidated the board’s 180-day bylaw as an unauthorized covenant amendment, voided fines/assessments, and enjoined enforcement measures.
- Mississippi Supreme Court reviewed de novo whether the rentals were residential, whether covenants allowed short-term rentals, and whether the board exceeded authority by adopting the 180-day rule.
Issues
| Issue | Plaintiff's Argument (LSPOA) | Defendant's Argument (Esplin) | Held |
|---|---|---|---|
| Whether short-term rentals via platforms (Airbnb, VRBO) are "residential use" under the covenants | Such rentals are transient/commercial, not residential; permanence distinguishes residential uses | Rentals are used as a place of abode (eating, sleeping, bathing); commercial activity occurs off-site/online | Rentals are residential uses; short-term stays fall within "residential purposes" |
| Whether Esplin’s short-term rentals constituted a nonconforming or prohibited use under the covenants | Short-term renting violates covenants and thus supports fines/enforcement | Covenants allow tenant use and do not set duration limits; ambiguous restrictions construed against the party seeking limitation | Covenants, read as a whole and strictly construed, do not prohibit short-term rentals; Esplin’s use conformed |
| Whether the board’s 180-day minimum-rental bylaw was valid or an unauthorized amendment of the covenants | Board has authority under Article XI to adopt reasonable rules governing use; board followed bylaw amendment procedure | Board’s bylaw functionally amended covenants and bypassed owner amendment requirements; only owners can amend covants | Board exceeded authority; the 180-day bylaw was an invalid amendment to the covenants and thus void |
| Validity of fines/assessments and enforcement steps taken against Esplin | Fines justified for covenant violations; enforcement (including sheriff involvement) proper | No valid covenant violation; fines and enforcement improper | All fines/assessments invalidated; injunction bars POA from harassing tenants or using sheriff to enforce covenants |
Key Cases Cited
- Royer Homes of Miss., Inc. v. Chandeleur Homes, Inc., 857 So.2d 748 (Miss. 2003) (contract construction is a question of law; review de novo)
- Kemp v. Lake Serene Prop. Owners Ass’n, Inc., 256 So.2d 924 (Miss. 1971) (restrictive covenants are strictly construed and ambiguities interpreted against restrictions)
- Kephart v. Northbay Property Owners Ass’n, 134 So.3d 784 (Miss. Ct. App. 2013) (board cannot use resolution to effect what amounts to an amendment of covenants reserved to owners)
- Slaby v. Mountain River Ests. Residential Ass’n, Inc., 100 So.3d 569 (Ala. Civ. App. 2012) (short-term vacation occupancy can be a residential use)
- Lowden v. Bosley, 909 A.2d 261 (Md. 2006) (use as an abode—regardless of transience—can satisfy "residential purposes")
- Mullin v. Silvercreek Condominium Owners’ Ass’n, 195 S.W.3d 484 (Mo. Ct. App. 2006) (similar analysis treating temporary occupancy as residential use)
- Schack v. Prop. Owners Ass’n of Sunset Bay, 555 S.W.3d 339 (Tex. Ct. App. 2018) (rental income alone does not convert residential use into commercial when on-site commercial activity is absent)
- Santa Monica Beach Prop. Owners Ass’n, Inc. v. Acord, 219 So.3d 111 (Fla. Dist. Ct. App. 2017) (property used as a place of abode is residential irrespective of rental term)