Can You Turn Your Michigan Lake House into a Short-Term Rental?

If 2020 and 2021 have taught us anything, it is how important it is to get away from home sometimes. Many Michigan families own property up north or on the lakeshore. These homes away from home can provide a great get away, but they often sit empty for months of every year. That could lead you to wonder whether you can turn your Michigan lake house into a short-term rental through sites like AirBnB, VRBO, or The answer depends on the local ordinances, and the language in your deed.

Local Ordinances Against Short-Term Rentals

The first step in determining whether you can turn your lake house into a short-term rental is to look at where it is located. Many Michigan municipalities have updated their zoning ordinances in the face of increasing use of AirBnB and similar websites. These new zoning laws may specifically ban or restrict the use of single-family dwellings as short-term rentals. If your property is zoned as residential, these local ordinances could make it illegal for you to list your home on VRBO or other short-term rental sites.

In at least one Michigan case, Reaume v Spring Lake Township, the court didn't even require the ordinance to be on the books before rentals began. The judges in that case said that the term single-family dwelling "unambiguously excludes transient or temporary rental occupation." That meant the property owner was already violating the zoning laws before the explicit ban on short-term rentals was passed.

Restrictive Covenants in Homeowners' Deeds

Once you determine whether your city, township, or municipality allows short-term rentals, you need to look closer - at the deed to your property. Many properties that are sold as part of a homeowners' association have a "restrictive covenant" written into the deed, limiting the use of the property. These restrictive covenants and the homeowners associations that enforce them could have rules against establishing short-term rentals on the property. Restrictive covenants are enforceable as long as they don't discriminate against specific categories of people.

In another Michigan case, Eager v Peasley, one neighbor sued another after she began renting her lake house on The lake house had a restrictive covenant in the deed limiting its use to "private occupancy" and prohibiting "commercial use." The judges in that case said that short-term rentals are not a residential purpose, since the people who visit never intend to be there permanently. Similarly, the ban on commercial use included short-term rentals since the homeowner was making money from renting out her property. Since the short-term rentals violated the restrictive covenants within the lake house's deed, the neighbor could prevent the property owner from posting her lake house as a vacation rental.

Get Legal Advice Before Listing Your Lake House as a Short-Term Rental

Michigan law doesn't make it easy for property owners to list their homes as short-term rentals and make money through websites like AirBnB. That's why you should speak to a real estate attorney before you publish your listing. A real estate attorney can review the local zoning ordinances and any restrictive covenants on your deed to determine whether there is anything stopping you from making money from your lakeshore property as a vacation rental. If there is a question of whether your property can be listed on AirBnB or VBRO, a real estate attorney can also help you negotiate with your homeowners association to avoid an expensive lawsuit later on. If you are a developer hoping to convert your property into a bed & breakfast or other commercial real estate venture you may be able to apply for a variance to local zoning ordinances. These variances are often granted on a case-by-case basis, so having an experienced attorney advocate on your behalf can be essential.

At Lachman King, our real estate attorneys have been landowners on Lake Michigan for years. We understand the limits Michigan law places on short-term rentals and can help you determine if there are any barriers to you turning your family lake house into an income property. We have a heart for the Great Lakes and an understanding of the federal, state, and local laws that affect the property rights of Great Lakes property owners. Our team will meet with you to explain your rights, and help you make the right call before you list your lakeshore property as a short-term rental. Contact us today to set up a meeting.