Short-Term Rentals Deemed Residential, Rather Than Commercial, Use

In Houston v. Wilson Mesa Ranch Homeowners Association, Inc., 360 P.3d 255 (Colo.App. 2015), a homeowner renting out a home in a residential subdivision through listings on the VRBO website was held not to have violated the Declaration's covenant restriction barring "commercial or business" use. The Court concluded that receipt of income for the rentals did not transform the essentially residential use of the property into a commercial use.

This case reminds us that careful drafting of Declaration amendments as well as Rules and Regulations, Architectural Guidelines and Responsible Governance Policies are crucially important for common interest community associations.


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