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Cullen Eckert
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Deed restrictions that could restrict property use as a Short Term Rental

Cullen Eckert
Posted Feb 13 2024, 15:01

All,

I have a short term rental in the Texas Hill Country that is in a neighborhood that has deed restrictions. I recently got a letter from a group of neighbors notifying me that the deed restrictions restrict use of the properties in the neighborhood to "single family residential use and that no part ccan be used for commercial or business purposes". I replied to this letter quoting relevant Texas case law (JBrice Holdings, L.L.C v. Wilcrest Walk Townhomes Association, Inc. (No. 20-0857) and others) showing that STR use is not considered business or commercial.

The next letter I got was only from one neighbor (the leader of the pack...) and said I was in violation of deed restrictions since some guests appeared to be "unrelated individuals" and the deed restrictions demand single family use. I am curious to see what everyone thinks of this argument. 

For a little more background we have a valid STR permit from the city we are operating in and the R1 zoning (single family residential) allows for STR use if you have a permit. My deed restrictions do not define "single family" or "single family residential" and this term is only mentioned once (as shown above) in the 7 page document. I think I know what my response may be, but would be, but I would like to hear your opinions.

Thank you!

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Caroline Gerardo
  • Lender
  • Laguna Niguel, CA
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Caroline Gerardo
  • Lender
  • Laguna Niguel, CA
Replied Feb 13 2024, 15:10

Need to read what the restriction says in full. What you posted means STR is a no. What are the consequences mentioned? They will catch you on the license and the ads. City permit means nothing, it's just a tax.

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Eric James
  • Malakoff, TX
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Eric James
  • Malakoff, TX
Replied Feb 13 2024, 15:13

Legalities depend on the letter of the law. What you are doing may or may not be allowed. Get a lawyer to give you an opinion and if what you are doing should be allowed have the lawyer write a response.

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Ryan Kelly
  • Real Estate Broker
  • Austin, TX
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Ryan Kelly
  • Real Estate Broker
  • Austin, TX
Replied Feb 14 2024, 17:34

@Cullen Eckert as others have mentioned, this is when I would seek counsel with a real estate attorney to have them review the deed restrictions and guide you on legal use.

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Chris Seveney
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  • Investor
  • Virginia
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Chris Seveney
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Replied Feb 14 2024, 20:27

@Cullen Eckert

Your legal reference while being a nice try is really invalid because the court overturned it because governing docs did not include it whereas if it is a deed restriction that is completely different from that case

It doesn't mean you will win or lose but be prepared for a hefty legal fight that could cost you tens of thousands to defend and the HOA going to make your life. A living hell.

Have fun