In July 2025, the Michigan Supreme Court affirmed the Michigan Court of Appeals’ ruling that a covenant restricting property to “single family residence purposes” is sufficient, on its face, to prohibit short-term vacation rentals. This case, Melvin R. Berlin Revocable Trust v. Rubin, arose in Swift Estates, a small lakeside subdivision governed by a 1977 Declaration. Some owners began using their homes as short-term rentals via a vacation rental company, prompting neighborhood complaints about noise, trespassing, and use of shared amenities.
The Court of Appeals, in its July 2023 opinion, made clear that covenants serve as enforceable contracts intended to preserve the residential nature of a community. Leveraging key precedents including O’Connor v. Resort Custom Builders (1999), Eager v. Peasley (2017), and Aldrich v. Sugar Springs Property Owners Association (2022), the Court reiterated that a “residence” requires permanence and continuity. Short-term rentals, by contrast, are inherently temporary and take on the character of a commercial enterprise. Because the Swift Estates Declaration did not contemplate transient or commercial use, the court upheld a permanent injunction barring those rentals.
By affirming that ruling in Melvin R. Berlin Revocable Trust v. Rubin, the Michigan Supreme Court confirmed the Court of Appeals’ opinion that a restriction on use to residential purposes may be sufficient to prohibit short-term rentals. Michigan’s appellate courts have consistently held that residential-use covenants, including “single family residence” mandates, are broad enough to include a ban on short-term rentals even where no express commercial prohibition exists.
Why This Matters
This decision reinforces a steady line of Michigan cases interpreting residential-use covenants. Courts have emphasized that a “residence” must involve permanence and continuity, which excludes the transient nature of short-term rentals. Even when the occupants use the property for residential living during their stay, the activity is considered commercial in character because it is temporary, frequent, and often marketed to the public. The courts have also found that broad language limiting use to “residential purposes” is sufficient to prohibit such activity, even without specific reference to rentals.
If you require assistance dealing with unauthorized short-term rentals in your community association, contact us at info@maglawpllc.com or (248) 254-7600.
