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COA: Rentals not restricted by covenants

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In a case of first impression, the Indiana Court of Appeals determined today the rental of cabins in a subdivision was allowed under its restrictive covenants because the rental property was for "residential use."

At issue in William Applegate, et al. v. Earl F. Colucci, et al., No. 62A05-0802-CV-112, was whether Earl Colucci violated three of the subdivision's restrictive covenants when he built cabins on his lots and rented them through a business he maintained on one of the lots. Applegate and other landowners filed a complaint against Colucci and Vince Hubert - who used Colucci's company to rent his cabin - seeking monetary damages and to enjoin them from any activity that violates the covenants.

The trial court enjoined Colucci for violating paragraph 2 of the covenant, which says no lot should be sub-divided any smaller than the original size, because he had placed multiple cabins on one lot. The trial court found in favor of Colucci in regards to the "interpretation" of paragraph 4, which states no commercial business shall be carried on upon any parcel and "nothing herein contained shall prevent the leasing or renting of property or structures for residential use."

The landowners argued the renting of cabins was a commercial business and violates paragraph 4. This exact issue is one of first impression, so the appellate court turned to past cases dealing with what constitutes residential use as guidance. It used Stewart v. Jackson, 635 N.E.2d 186 (Ind. Ct. App. 1994), and Lewis-Levett v. Day, 875 N.E.2d 293 (Ind. Ct. App. 2007) - both of which dealt with day cares in neighborhoods with restrictive covenants - to determine the short-term rental of Colucci's cabins constitute a residential use.

Also, the covenants don't expressly prohibit the short-term rental of the lots in the neighborhood and appear to allow any type of rental as long as it is for residential use, wrote Judge James Kirsch.

"The people who rent Colucci's cabins use the structures for eating, sleeping, and other typical activities associated with a residence or dwelling place," he wrote. "Although we recognize that the renters' occupation of the cabins is only on a temporary basis and the definition of residential seems to contemplate a more permanent presence, we find that this definition is at odds with the covenant language explicitly allowing the rental or lease of property."

Whether or not Colucci's maintenance of a real estate office to support the cabin rentals on one of the lots violates paragraphs 1 and 4 is a material question of fact. The appellate court reversed summary judgment in favor of the landowners on this issue and remands for further proceedings.

The trial court also erred in entering the injunction against Colucci based on paragraph 2 because although Colucci had built separate structures on the same lot, there was no evidence he was planning on dividing the lots into separate tracts of land to sell, wrote the judge.

The appellate court also denied requests from both parties for attorney fees at this time.

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  1. A sad end to a prolific gadfly. Indiana has suffered a great loss in the journalistic realm.

  2. Good riddance to this dangerous activist judge

  3. What is the one thing the Hoosier legal status quo hates more than a whistleblower? A lawyer whistleblower taking on the system man to man. That must never be rewarded, must always, always, always be punished, lest the whole rotten tree be felled.

  4. I want to post this to keep this tread alive and hope more of David's former clients might come forward. In my case, this coward of a man represented me from June 2014 for a couple of months before I fired him. I knew something was wrong when he blatantly lied about what he had advised me in my contentious and unfortunate divorce trial. His impact on the proceedings cast a very long shadow and continues to impact me after a lengthy 19 month divorce. I would join a class action suit.

  5. The dispute in LB Indiana regarding lake front property rights is typical of most beach communities along our Great Lakes. Simply put, communication to non owners when visiting the lakefront would be beneficial. The Great Lakes are designated navigational waters (including shorelines). The high-water mark signifies the area one is able to navigate. This means you can walk, run, skip, etc. along the shores. You can't however loiter, camp, sunbath in front of someones property. Informational signs may be helpful to owners and visitors. Our Great Lakes are a treasure that should be enjoyed by all. PS We should all be concerned that the Long Beach, Indiana community is on septic systems.

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