Opinion ID: 1313049
Heading Depth: 2
Heading Rank: 3

Heading: severability of provisions

Text: Invalidation of any of the covenants, conditions or limitations in this instrument contained by Judgment or Court Order, shall not in any wise affect any of the other covenants, conditions and limitations which shall remain in full force and effect. ENFORCEMENT OF RESTRICTIONS If any person shall violate or attempt to violate any of the covenants or restrictions herein contained, it shall be lawful for any other person or persons owning any lot or building site in said subdivision to prosecute any proceeding at law or in equity against such person or persons, either to prevent them from so doing or to recover damages or other dues for such violation. The restrictions are silent with regard to interval ownership or timesharing arrangements, under which a person owns an occupancy right for a defined period each year. Resort Custom Builders, Inc., constructed a home on Lot 7 of the Valley View subdivision. After its initial attempt to sell the home outright failed, Resort Custom Builders decided to market interval ownership shares. In a detailed January 27, 1994 document entitled Declaration of Covenants Conditions and Restrictions for Interval Ownership, Resort Custom Builders established the rights and responsibilities of those who would participate in the venture. Basically, a purchaser would buy occupancy rights in one or more week-long intervals, along with a corresponding undivided interest in the property. Resort Custom Builders intended to sell occupancy rights for forty-eight weeks of the year, with four weeks reserved for maintenance. As is typical in time-sharing arrangements, interval owners could place their occupancy rights in commercial pools that facilitate trades with those who have occupancy rights in homes at other resorts. Interval ownership in condominiums exists in other portions of Shanty Creek, but it is explicitly authorized by the documents governing development. Shanty Creek, however, also facilitates daily and weekly rentals of homes in Valley View and other residential areas. Some homeowners in Valley View rent their homes for use by other persons using this procedure. At least one home in Valley View is jointly owned by friends, and, as one would expect, many of the homes are jointly owned by married persons. In March 1994, several Valley View property owners and the Shanty Creek Lodge Association sued to enjoin Resort Custom Builders from selling interval ownership interests. Plaintiffs claimed that interval ownership violated the use and character restrictions applicable to the property. The following month, Resort Custom Builders sold two one-week shares to Fred and Janet Ruppert, who financed the purchase with a mortgage to Franklin Bank, N.A. The trial court thereafter heard cross-motions for summary disposition. At that time, the court opined that the restrictions governing development in the Valley View subdivision did not permit interval ownership. The court issued a preliminary injunction, barring the sale of interval-ownership interests in Lot 7. The court, however, did not grant summary disposition for plaintiffs because it postponed consideration of defendants' defenses including estoppel and waiver premised on Shanty Creek's practice of allowing the short-term rental of homes in Valley View. In early 1995, the court added the Rupperts and Franklin Bank as defendants. Plaintiffs filed an amended complaint. At the conclusion of the bench trial, the court determined that short-term rental is different in character from interval ownership, and held that Shanty Creek's practice of allowing the former did not waive its right to prohibit the latter. Among the cited differences the court explained that there remains a single known owner in a rental whom neighboring property owners can contact if a renter causes problems. With regard to multiple ownership of a single residence, the trial court declined to wade into the abstract question of how many owners it would take to become a violation of Valley View restrictions.... Citing testimony that daily and weekly rental of private homes had not been extensive, the court likewise found it unnecessary to decide whether renting a house for a substantial portion of the year would violate the restrictions of the subdivision. Accordingly, the trial court declared the January 27, 1994 covenants, conditions, and restrictions for interval ownership null and void. In a declaratory judgment and permanent injunction, the court set aside the interval ownership document, as well as the Rupperts' purchase and the accompanying mortgage. [1] The Court of Appeals reversed. [2] It explained that the law favors the free use of property, and held that interval ownership was not incompatible with residential purposes. Restrictive covenants are construed strictly against those claiming the right to enforce them, and all doubts are resolved in favor of the free use of property. Beverly Island Ass'n v. Zinger, 113 Mich.App. 322, 325, 317 N.W.2d 611 (1982). A restriction allowing residential uses permits a wider variety of uses than a restriction prohibiting commercial or business use. Id. at 326 [317 N.W.2d 611]. A business use may not violate a residential use covenant so long as the nonresidential use was casual, infrequent or unobtrusive and was not detrimental to the property values of neighbors. Id., citing Wood v. Blancke, 304 Mich. 283, 8 N.W.2d 67 (1943). The focus must be on the activity involved and how it parallels the ordinary and common meaning of use for residential purposes. Zinger, supra at 327 [317 N.W.2d 611]. We construe the covenant in favor of defendants and hold that based on the evidence presented, while interval ownership may be a business use, we find no reason to believe that nonresidential use associated with interval ownership will be obtrusive and detrimental to the property value of neighbors. The testimony at trial indicated that it was acceptable for homeowners to rent out their homes on a weekly basis all year long. While the type of ownership is different, in terms of use, we find that distinguishing interval ownership from year around renting creates a distinction without a difference. The plaintiffs have applied to this Court for leave to appeal.