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. I have an open CHINS case I failed a urine screen I have since got clean completed IOP classes now in after care passed home inspection my x sister in law has my children I still don't even have unsupervised when I have been clean for over 4 months my x sister wants to keep the lids for good n has my case working with her I just discovered n have proof that at one of my hearing dcs case worker stated in court to the judge that a screen was dirty which caused me not to have unsupervised this was at the beginning two weeks after my initial screen I thought the weed could have still been in my system was upset because they were suppose to check levels n see if it was going down since this was only a few weeks after initial instead they said dirty I recently requested all of my screens from redwood because I take prescriptions that will show up n I was having my doctor look at levels to verify that matched what I was prescripted because dcs case worker accused me of abuseing when I got my screens I found out that screen I took that dcs case worker stated in court to judge that caused me to not get granted unsupervised was actually negative what can I do about this this is a serious issue saying a parent failed a screen in court to judge when they didn't please advise

  2. I have a degree at law, recent MS in regulatory studies. Licensed in KS, admitted b4 S& 7th circuit, but not to Indiana bar due to political correctness. Blacklisted, nearly unemployable due to hostile state action. Big Idea: Headwinds can overcome, esp for those not within the contours of the bell curve, the Lego Movie happiness set forth above. That said, even without the blacklisting for holding ideas unacceptable to the Glorious State, I think the idea presented above that a law degree open many vistas other than being a galley slave to elitist lawyers is pretty much laughable. (Did the law professors of Indiana pay for this to be published?)

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