Court Case Ruling on Short Term Rentals

This case involved a dispute between a homeowner (“Owner”) and his owners association (“Association”) in Texas over Owner’s use of his property for short-term vacation rentals. In a five month period, Owner had entered into thirty-one short-term rental agreements for his property which ranged from one to seven days each in duration. To facilitate this use of his property, Owner had formed a limited liability company and paid applicable Texas Hotel Taxes.  Association took the position that Owner’s use of his property for short-term rentals violated Association’s restrictive covenants that limit tracts within the development to “residential” purposes and “single-family residences.”