This makes reference to court cases in SC and Kansas.
Sample letter that you can tailor for your use:
March 9, 2022
Dear XXXXX Village Board:
We are writing in response to your letter dated March 3, in which you alleged that the use of our second home as a part-time short-term rental violates Article VIII, Section 2(f) of the Covenants.
If our short-term tenants have caused any problems, we would ask that you send us detailed information as to the nature of the problems so we can take action to prevent such incidents in the future. We want to be good neighbors and work with you in good faith to ensure our home is not disruptive to the community. We do have a high-end local property management company that is available 24/7 in case of emergency. If the Board ever has an immediate concern, you can phone Renee and her team at (864) XXXXXXX.
The Board, however, is exceeding its authority in writing, “You can’t rent out your house on a short term basis.” We conducted due diligence before we purchased our property, and Glastonbury Village’s Covenants simply do not ban short-term rentals. Article VIII, Section 2(f) prohibits “industry, business, trade, occupation, or profession of any kind” excepting certain actions by the builder while new homes were being sold, and home offices. However, by the Covenants’ numerous references to “tenants” (see Article II, Section 2 for one example) the Covenants assume that properties will be rented out. There is no legal distinction that makes a short-term rental any more of a “business” than a long-term rental. In both cases, a homeowner rents their house, often using a management company, and collects rent that is reported to the IRS as rental income. The Covenants do not make any such distinction between long-term and short-term rentals.
Most importantly, on August 5, 2016, the South Carolina Attorney General (SCAG) issued an opinion titled “Pertaining to covenants and bylaws of homeowners associations.” It referenced the Kansas Court of Appeals decision in Kiekel v. Four Colonies Homes ***’n, which dealt specifically with the question of whether an HOA could ban short-term rentals if such a restriction was not present in the Covenants. The facts of the case are very similar to our situation—the Declaration of Covenants assumed by its use of the word "tenants" that some homeowners would rent their property.
In Kiekel, the court found that the HOA had no right to ban short-term rentals, because “[t]he bylaw amendment contained extensive property use restrictions concerning the rental of property
. . . which only could be accomplished through an amendment to the Declaration [of
Covenants].”
The SCAG notes that the "court held that the HOA could not ‘circumvent the intent of the Declaration, the enabling document, by subsequently amending the Bylaws.' … Kiekel, therefore, stands for the rule that where the bylaws of an HOA purport to restrict the use of property further than contemplated in the covenants, there is a conflict and the covenants will control.”
The opinion of the SCAG went on to declare that “the general relationship between covenants and bylaws described in Kiekel is consistent with South Carolina law.” He cites South Carolina Jurisprudence to note that “while homeowners' associations typically have the power to regulate the use of common areas, their regulations cannot prohibit a usage contrary to any restrictions creating easements or rights of use of property in owners.”
In short, if you were to press this issue and take us to court, all federal and state precedent overwhelmingly indicates the court would find in our favor, and this enforcement action would prove an expensive waste of association money.
All that to say, we politely request that you drop this unlawful enforcement action. If you choose to pursue this matter, we would like to request a formal hearing, either virtually, or in-person with a designated representative attending on our behalf.
Finally, we are happy to work with you to make sure the house is not disruptive to the neighborhood. However, we are unable to convert it to a long-term rental, because we stay there whenever we come to XXXXX to visit our son and daughter-in-law, and we are considering moving in full-time within the year. Our property manager already has a number of systems in place to prevent her properties from becoming party houses, and she keeps our home in beautiful condition in a way that adds value to the surrounding community, but we are happy to take further action if need be.
Sincerely,
---REDACTED---
