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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. I just wanted to point out that Congressman Jim Sensenbrenner, Senator Feinstein, former Senate majority leader Bill Frist, and former attorney general John Ashcroft are responsible for this rubbish. We need to keep a eye on these corrupt, arrogant, and incompetent fools.

  2. Well I guess our politicians have decided to give these idiot federal prosecutors unlimited power. Now if I guy bounces a fifty-dollar check, the U.S. attorney can intentionally wait for twenty-five years or so and have the check swabbed for DNA and file charges. These power hungry federal prosecutors now have unlimited power to mess with people. we can thank Wisconsin's Jim Sensenbrenner and Diane Feinstein, John Achcroft and Bill Frist for this one. Way to go, idiots.

  3. I wonder if the USSR had electronic voting machines that changed the ballot after it was cast? Oh well, at least we have a free media serving as vicious watchdog and exposing all of the rot in the system! (Insert rimshot)

  4. Jose, you are assuming those in power do not wish to be totalitarian. My experience has convinced me otherwise. Constitutionalists are nearly as rare as hens teeth among the powerbrokers "managing" us for The Glorious State. Oh, and your point is dead on, el correcta mundo. Keep the Founders’ (1791 & 1851) vision alive, my friend, even if most all others, and especially the ruling junta, chase only power and money (i.e. mammon)

  5. Hypocrisy in high places, absolute immunity handed out like Halloween treats (it is the stuff of which tyranny is made) and the belief that government agents are above the constitutions and cannot be held responsible for mere citizen is killing, perhaps has killed, The Republic. And yet those same power drunk statists just reel on down the hallway toward bureaucratic fascism.

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