Texas Court Says Short Term Rentals of Owner’s Property Were Prohibited Business Purposes

Texas Appellate Court decision (November 16, 2016).

In this case, a homeowner (“Owner”) brought an action against his homeowners’ association (“Association”) challenging deed restrictions which provided that homes must be “used solely for residential purposes.” After Owner had been doing Short Term Rentals (typically one to seven day periods), the Association notified him that he was in violation of the applicable deed restrictions because he was using his home as a commercial rental property rather than for residential purposes as required by the restrictions. The Owner disagreed and filed an action against the Association for breach of the restrictive covenant and seeking a declaration from the court that the applicable deed restrictions do not impose duration limits on leasing. The trial court ruled in favor of the Association and the Owner appealed.