Texas Supreme Court Makes it Harder for S.A. to Regulate Home Rentals

The Texas Supreme Court may have just put up significant barriers to efforts by the City of San Antonio to pass restrictions on Airbnb, Home Away, and other short term rental companies, News Radio 1200 WOAI reports.

The justices ruled in the case of a man who owns a home in Timberwood Park, in far north Bexar County, that as long as a home is being used for ‘residential purposes,’ who lives there is the homeowners’ business.

According to the opinion, Kenneth Tarr began renting out his entire home to paying visitors when he took a job in Houston.

But his Homeowners Association sued, claiming that by renting out the house, Tarr was in violation of an HOA rule that reads:

“All tracts shall be used solely for residential purposes, except tracts designated for business purposes, provided, however, no business shall be conducted on any of  these  tracts  which  is  noxious  or  harmful  by  reason  of  odor,  dust,  smoke,  gas,  fumes, noise or vibration . . . . “

The HOA won in the trial court, with the judge ruling that “one’s  use  of  a  home  is  not  residential  unless  the  occupant is physically present and has an existing intent to physically remain there for a sufficient duration.”

The act of renting out the home, the trial court said, made it a ‘business,’ like a hotel, and in violation of HOA rules.

But Tarr appealed, and in its ruling, the State Supreme Court, while not overturning the HOA’s protective covenants, did rule that “Affording these Phrases their general meanings and interpreting the restrictions as a whole, we hold that so long as the occupants to whom Tarr rents his single-family residence use the home for a “residential purpose,” no matter how short-lived, neither their on-property use nor Tarr’s off-property use violates the restrictive covenants in the Timberwood deeds.”

So, essentially, as long as residents are living in the home and are not conducting business out of the home, it is legal for Tarr to rent his home to them.

“Moreover, Tarr’s use does  not  qualify  as  a  commercial  use.  Accordingly,  as  the  association  failed  to  adduce  any  evidence that Tarr’s tenants have used the property in any manner inconsistent with a residential purpose, summary judgment for the association was improper.”

Legal experts tell News Radio 1200 WOAI the Texas Supreme Court ruling will not block the City of San Antonio from imposing restrictions on short term home rentals, but will require any new ordinance to be so carefully worded that the city may not achieve the results it is seeking.

The City is looking to restrict the number of short term rentals on a street, require that only owner-occupied homes be rented through short term sites, and impose restrictions that include noise, parking, and safety rules on short term rental properties.

READ THE RULING:  http://www.txcourts.gov/supreme/orders-opinions/2018/may/may-25-2018/

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