“There’s No HOA, So I’m Fine”… Not Necessarily

One of the most common assumptions I hear from property owners and short-term rental hosts is some version of: “There’s no HOA, so I’m good to go.” In Michigan, that assumption is often incorrect — and it can be an expensive one.

Deed restrictions, also referred to as restrictive covenants, are private limitations recorded in a property’s chain of title. They are not zoning laws, and they are not the same thing as HOA rules. While homeowners associations often enforce deed restrictions, the existence of an HOA is not what gives those restrictions legal force. A property can be subject to enforceable deed restrictions even when there is no HOA at all.

This distinction matters because enforcement of deed restrictions is private. Unlike zoning violations, which are enforced by municipalities, deed restrictions are enforced by the parties who benefit from them. In practice, that often means a neighbor. When a deed restriction is violated, enforcement typically comes in the form of a civil lawsuit seeking an injunction to stop the prohibited use, sometimes along with damages or attorney fees depending on the language of the restriction.

For short-term rental owners, this is where problems frequently arise. A property may be located in a jurisdiction that allows STRs by ordinance, and the owner may correctly conclude that zoning is not an issue. But if a recorded deed restriction limits rentals, requires minimum lease terms, or restricts use to single-family residential purposes, a neighbor can still bring suit to enforce that restriction. Zoning approval does not override a private covenant.

Another common misconception is that deed restrictions only apply in large subdivisions or formal developments. In reality, restrictions can appear in a single deed, a developer’s master declaration, or a recorded agreement affecting a small number of parcels. Many buyers never review these documents because they are not presented as part of an HOA packet and are easy to overlook during closing.

Once a neighbor files suit to enforce a deed restriction, options can be limited. Courts in Michigan generally treat valid restrictive covenants as enforceable contracts that run with the land. While there are defenses in certain circumstances — such as abandonment, waiver, or ambiguity — those arguments are fact-specific and rarely something a property owner wants to test after investing in a property and building a rental business around it.

The practical takeaway is simple but important. “No HOA” does not mean “no restrictions.” Before purchasing or operating a rental property, particularly a short-term rental, it is critical to review the recorded deed restrictions affecting the property and understand who has the right to enforce them. That review should happen before money is spent, not after a cease-and-desist letter or lawsuit arrives.

If you own property in Michigan or are evaluating an STR investment and want to understand whether deed restrictions apply — and what enforcement risk looks like — this is an issue worth addressing early. In real estate, private land use restrictions are often where the real risk lives.