TL;DR: On July 9, 2025, the Michigan Supreme Court split 3–3 in Berlin Trust v. Rubin (the Swift Estates case). That deadlock leaves the Court of Appeals’ 2023 decision in place for that case, confirming that an HOA’s “single-family residence purposes” covenant can be enforced to bar short-term rentals there. It does not create new statewide precedent about zoning or “consistent with residential use”—but it reinforces a pattern courts have been following. Michigan Courts
What actually happened?
- The Supreme Court affirmed “by equal division,” so there’s no majority opinion and no new Supreme Court precedent. The order includes a concurrence (Justices Welch & Zahra) agreeing the Swift Estates covenant barred STRs on those facts, and a dissent (Justice Thomas, joined by Chief Justice Cavanagh and Justice Bolden) arguing the phrase “single family residence purposes” is ambiguous and should be read in favor of free use. Michigan Courts
- Justice Noah Hood didn’t participate; that’s why the Court deadlocked. Legal News
For context, the underlying Court of Appeals opinion (unpublished) concluded the owners’ properties were “mass-marketed” almost exclusively for short-term rentals and treated that activity as commercial use, relying on Terrien v. Zwit and related cases interpreting restrictive covenants.
Key point: This is a private-covenant/HOA case—not a zoning case—so it doesn’t control municipal “residential use” questions. It does, however, fit a Michigan line of cases that often views near-exclusive STR operation as inconsistent with “residence-only” deed restrictions.
Does this “set precedent” for STRs statewide?
Short answer: Not in the way headlines imply. A 3–3 affirmance leaves the judgment intact but creates no new binding Supreme Court rule beyond this dispute. The Court of Appeals decision remained unpublished, so it is not binding statewide precedent (it’s persuasive). Practically, though, the order reinforces that:
- If your HOA/condo declaration limits property to “single-family residence purposes” (and you’re operating as an almost-exclusive STR), Michigan courts may enjoin that use based on existing published reasoning about covenants and “commercial” activity.
- The Supreme Court is not unified on how to read “single-family residence purposes.” The dissent cataloged multiple plausible readings and cited sister-state decisions finding such phrases ambiguous or permissive of STRs, which must be construed in favor of free use. That tells us this question is still live in Michigan doctrine. Michigan Courts
Why this matters for STR owners
- Private covenants matter—read them carefully. If you’re in an HOA/POA, your board and neighbors may enforce “residence-only” language against STRs, especially where the home is marketed and used almost exclusively for transient stays.
- Zoning is a different battlefield. Municipal “residential use” vs. “commercial use” for STRs wasn’t decided here. Local ordinances still vary, and courts often scrutinize how an ordinance is written and applied. (See the Peninsula Township winery litigation for how unclear, burdensome rules can backfire.)
- “Consistent with residential use” remains the crux. Until Michigan clarifies that phrase legislatively, owners and municipalities will keep litigating its meaning.
Setting this in broader context: Peninsula Township & beyond
In the Peninsula Township (Old Mission Peninsula) winery dispute – resulting in a $50M lawsuit being won against the Township, the complaint highlights how unclear or overreaching local rules—from compelled labeling/signage rules to “guest behavior” micromanagement and burdensome “40% estate-grown” thresholds—created constitutional and practical problems for legitimate businesses. While that case concerns wineries, it illustrates the cost of vague, shifting, and difficult-to-administer standards, a pattern STRs encounter repeatedly.
Notably, the Township’s own counsel had acknowledged several provisions were unconstitutional or preempted—yet they persisted in enforcement—underscoring how vital clarity and legality are in local regulation. STRs deserve that same clarity – and local governments should take note that unclear and difficult to administer ordinances may have costly consequences.
When we work together in good faith, solutions that protect all property owner rights and support healthy communities are within reach.
A roadmap for Michigan: How other jurisdictions are solving this
- Tax classification as residential: Minnesota now defines “short-term rental property” as residential for property-tax classification (class 4b)—explicitly covering non-homestead homes rented for <30 days. That doesn’t decide zoning, but it’s a concrete policy choice that aligns STRs with residential treatment in at least one core area of state law. Michigan can borrow this clarity. MN Revisor’s Office
- Sister-state case law: The Swift Estates dissent points to numerous high-court decisions elsewhere that either permit STRs under “residential purposes” covenants or treat the language as ambiguous (and thus construed in favor of free use). This shows Michigan isn’t locked into one interpretation; the Legislature can (and should) settle the standard. Michigan Courts
What this doesn’t do
- It doesn’t make all STRs “non-residential.” The decision is about one community’s deed and how those homes were used. Many owners mix personal use with occasional renting; facts matter.
- It doesn’t decide municipal zoning statewide. Cities and townships still need clear, objective rules tied to nuisance behaviors (noise, parking, occupancy, trash) rather than labels alone.
MiSTRA’s position: Clarity, consistency, and fairness
Our industry needs stable rules that protect neighborhoods and property rights without penalizing lawful residential hospitality use. MiSTRA supports a Michigan-specific legislative fix that:
- Defines STRs as a residential use for zoning/building/tax when the dwelling is used by a single group as a dwelling (sleeping, eating, living) under enforceable occupancy and safety limits.
- Targets actual harms with standard nuisance tools (noise, trash, parking) and objective safety requirements, rather than categorical bans.
- Respects private covenants (communities can contract for stricter limits) while preventing municipalities from back-dooring broad bans via vague “commercial” labels.
- Avoids administrative traps we’ve seen elsewhere (e.g., compelled messaging, arbitrary thresholds, or micromanagement of guest behavior).
What STR owners should do now
- If you’re in an HOA/condo: Review your declaration and rules; get counsel before relying on STR income. “Residence-only” language plus near-exclusive transient use is risky.
- If you operate in a municipality with ambiguous STR rules: Document compliance with safety and nuisance standards, and engage in the rule-making process to push for clear, enforceable definitions tied to behavior, not labels—lessons we’ve learned from other regulated sectors.
- If you’re evaluating investments: Underwrite with sensitivity to covenant risk and local ordinance clarity—and consider political/advocacy risk as part of market due diligence.
Where MiSTRA is headed (and how you can help)
MiSTRA’s Legislative Affairs team is preparing a 2025–26 campaign aimed squarely at clarifying “consistent with residential use.” The goal is a Michigan-made standard that aligns tax, zoning, and safety policy with reality on the ground—and reduces litigation by design. If you believe in a clear, constitutional, and practical STR framework, please consider supporting our policy work. (Every dollar advances expert drafting, coalition-building, and data analysis.)
👉 Support MiSTRA’s legislative initiative —Become a member today! Every membership helps advance our cause and provide needed resources to stand united against unfair, unconstitutional regulations in the state of Michigan.
Sources & further reading
Coverage of the Court’s 3–3 deadlock and non-participation.
Court of Appeals (unpublished) reasoning on “commercial use” and near-exclusive STR operation.
Peninsula Township winery complaint (illustrating the harms of vague/overreaching local rules).
Minnesota property-tax classification: defines “short-term rental property” as residential class 4b (non-homestead, <30 days).
This post is informational and does not constitute legal advice.