Santa Monica Beach Property Owners Ass'n v. Acord
219 So. 3d 111
| Fla. Dist. Ct. App. | 2017Background
- Appellees own two beach-area lots subject to restrictive covenants limiting use to "residential purposes" and prohibiting "business or manufacturing purposes."
- Association observed the properties advertised on VRBO and sent letters in Dec. 2015 demanding that the owners stop operating them as "vacation rental[s]."
- Association sued for declaratory relief (July 2016), alleging short-term rentals violate the covants because they operate as transient public lodging and involve licensure and tax remittance.
- Appellees moved to dismiss for failure to state a claim, arguing short-term rentals remain residential because renters use the premises for ordinary living activities.
- Trial court dismissed with prejudice, focusing on the character of use (sleeping/eating = residential), not duration or income, and noting covenants lack an explicit ban on short-term rentals.
- The First District Court of Appeal affirmed, holding short-term vacation rentals are residential uses under these covenants absent allegations of nonresidential indicia.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether short-term vacation rentals violate covenants limiting use to "residential purposes" and prohibiting "business" uses | Short-term rentals are a business / transient lodging (licensed, taxed, advertised) and thus forbidden | Rentals are residential in character because occupants use the property for ordinary living (sleeping, eating); income/licensing do not change the use | Short-term rentals are residential uses and do not violate the covenants absent allegations of nonresidential business indicia |
| Whether rental income, advertising, or regulatory licensure converts residential use into business use | Income, advertising, and licensure show commercial character | Receipt of rent and compliance with regulation do not alter that renters use the premises for residential purposes | Earning income, advertising, or licensure alone does not transform the use into a prohibited business use |
| Whether ambiguity in covenants should be construed against owners or in favor of free use | Ambiguity could be read to restrict rentals | Restrictive covenants are disfavored and must be strictly construed in favor of landowner use unless explicit restriction exists | Ambiguity favors the owners; absence of explicit prohibition on short-term rentals defeats the Association’s claim |
| Whether prior cases (e.g., bed-and-breakfast or event-venue cases) dictate a different result | Analogous restrictions should prohibit such rentals | Distinguish cases showing clear business indicia (manager, signs, services, frequency/intensity) | Distinguishable—those cases involved additional nonresidential indicia; here complaint alleged only ordinary residential occupancy |
Key Cases Cited
- Wilkinson v. Chiwawa Communities Ass’n, 327 P.3d 614 (Wash. 2014) (short-term occupants using a home for sleeping/eating is residential use)
- Mason Family Trust v. DeVaney, 207 P.3d 1176 (N.M. Ct. App. 2009) (renting dwellings short-term does not reasonably convert residential use into a prohibited commercial use)
- Slaby v. Mountain River Estates Residential Ass’n, 100 So.3d 569 (Ala. Civ. App. 2012) (temporary vacation occupancy constitutes residential use despite advertising/receipt of rent)
- Ross v. Bennett, 203 P.3d 383 (Wash. Ct. App. 2008) (use for ordinary living purposes, not duration, determines residential character)
- Lowden v. Bosley, 909 A.2d 261 (Md. 2006) (receipt of rental income does not detract from tenants’ residential use)
- Yogman v. Parrott, 937 P.2d 1019 (Or. 1997) (analysis focusing on character of use rather than commercial labels)