Ruffed Grouse Ridge v. Hura: short-term rental of a home can still be residential use

What happened

Charles Hura bought a home in the Ruffed Grouse Ridge development in Lakeville, Pennsylvania in 2020. Since 2021 he had rented it to private parties, advertising on Airbnb, Vrbo, and his own rental website; most stays ran Friday through Sunday, and he used the home as his own vacation home when it was not rented. Slip op. at 1–2.

A restriction incorporated into his deed provided:

“The above-described premises shall not be subdivided, and any building to be erected thereon, shall not at any time be used for commercial purposes, but the use of the same shall be limited strictly to private residential purposes only.”

The association amended its bylaws in 2021 to bar rentals under 30 days, sent Mr. Hura a cease-and-desist letter calling his rentals a “commercial entity,” and sued. Slip op. at 3–4. The Wayne County trial court granted summary judgment to Mr. Hura and declared the bylaw amendment void. Slip op. at 5–6. The association appealed.

What the court decided

Covenants are read strictly, in favor of free use

Restrictive covenants “are to be strictly construed against persons seeking to enforce them and in favor of the free and unrestricted use of property,” and “nothing short of a ‘plain disregard’ of the restrictive covenant’s express terms can create [a] violation of the covenant.” Slip op. at 7–8 (quoting Pocono Summit Realty, LLC v. Ahmad Amer, LLC, 52 A.3d 261, 269 (Pa. Super. 2012)); 317 A.3d at 669–70.

Duration is the wrong focus; how the renters use the home is what counts

Before the trial court, the association conceded that leasing a home and collecting rent were not, in themselves, prohibited, and that annual or six-month rentals would be fine. It argued instead that the “transient” nature of short-term rentals was the problem. Slip op. at 8–9. The court held that the association “incorrectly focuses on the duration of the rentals rather than on the purpose of the renters’ physical use of the Property.” Slip op. at 9; 317 A.3d at 670.

“Construing the language of the restrictive covenant strictly against the Association, as we must, we conclude that Mr. Hura’s rental of the Property to private parties, whether on a short-term or long-term basis, does not violate the restrictive covenant, provided that the renters use the Property solely for residential purposes.”

The court agreed with the trial court that the covenant’s plain language did not limit the property to the owner’s own residential use, did not prohibit renting, and made no distinction between short-term and long-term rentals. The inhabitants—owner, family, friends, or renters—were “using the Property in its entirety to sleep, eat, bathe and generally reside for a short-term period.” Slip op. at 9.

What a residential-use covenant is aimed at

Noting the association’s own acknowledgment that short-term, Airbnb-type rentals were not contemplated when the restrictions were written, the court read the covenant’s intent as preventing the property from being “physically used to operate a business or commercial enterprise, such as a professional office, retail store, or corporate meeting space, not to prohibit rental of the Property to private individuals for residential use.” Slip op. at 10; 317 A.3d at 671.

Zoning cases about “families” did not control

The association relied on Slice of Life, LLC v. Hamilton Township Zoning Hearing Board, 207 A.3d 886 (Pa. 2019), a zoning case. The court found it “inapposite” because it turned on the zoning ordinance’s definitions of “family” and “single housekeeping unit,” terms not at issue in the covenant. Slip op. at 11 & n.7; 317 A.3d at 671–72.

Limits worth knowing

• The renters must actually use the home residentially. The trial court required Mr. Hura to remove advertising that invited commercial uses such as a “corporate retreat,” and the Commonwealth Court agreed that was properly prohibited. Slip op. at 10–11.
• The appeal turned on the covenant’s wording. A covenant that expressly prohibits short-term rentals, or expressly addresses transient occupancy, is a different case.
• The association’s challenge to the trial court’s ruling on its bylaw amendment was held waived on appeal, so the Commonwealth Court did not decide that issue. Slip op. at 12 n.8.
• Ruffed Grouse is a use case, not a fee case. Its relevance to fees is indirect: an association that justifies a special rental charge by calling short-term renting “commercial” has to reckon with this decision.

Pin cites are to the slip opinion filed May 31, 2024 and, where indicated, to the reported decision. This summary is educational and is not legal advice.