Houston v. Wilson Mesa Ranch Homeowners Association, Inc.
San Miguel County · CO · Colorado Court of Appeals
Member win · rentals
What happened
David Houston's trust owned a Wilson Mesa Ranch home and listed it on VRBO for short-term vacation stays. After learning of the rentals, the board adopted Section 11 banning rentals under thirty days without prior approval. Houston sued for a declaration that short-term rentals were allowed. The trial court ruled for Houston; the Colorado Court of Appeals affirmed (Aug. 13, 2015), holding residential-use and no-commercial-business covenants did not bar temporary vacation rentals of a single-family home.
What the court (or agency) held
The Colorado Court of Appeals held that short-term vacation rentals of a single-family home were not barred by covenants requiring residential use and prohibiting commercial or business use. Temporary occupancy by paying guests remained residential in character on these facts; the association's later administrative ban did not rewrite the recorded covenants' meaning. Judgment for the owner affirmed.
Why this matters for members
Boards cannot stretch "residential" / "no commercial use" covenants to ban short-term rentals without clearer recorded language—or a valid amendment. Post-hoc administrative rules are weaker than recorded covenants when interpreting use restrictions.
What the member did
Objected that Section 11 was an unlawful covenant amendment, then sued for a declaration that the recorded covenants did not bar short-term rentals and that the fines were unenforceable.
Questions for the board
- Do our recorded covenants expressly address minimum lease terms or short-term/vacation rentals?
- If we adopted administrative rental rules after rentals began, how do those rules relate to the declaration's amendment process?
- What notice did owners receive before any rental policy change?
Questions for a lawyer
- Under Colorado HOA/covenant law after Houston, how are residential-use clauses applied to VRBO-style rentals in our documents?
- What amendment vote and recording steps would be needed to add a minimum rental term?
- What declaratory-judgment strategy fits an owner already renting short-term?
Citation
Houston v. Wilson Mesa Ranch Homeowners Association, Inc., 2015 COA 113, 360 P.3d 255; No. 14CA1086 (2015-08-13). Colorado Court of Appeals. Outcome chip: member_win. Source: https://cases.justia.com/colorado/court-of-appeals/2015-14ca1086.pdf?ts=1439478346
_General information, not legal advice. Outcomes turn on facts and current law._
General information, not legal advice. Outcomes turn on facts and current law.