Timber Lake v. Gribi: Long-Term Rentals and Commercial Use

Quick Answer

On September 18, 2025, the Michigan Court of Appeals decided Timber Lake Drive Property Owners' Association v Gribi, No. 369520, and held that a nine-month residential lease violated a subdivision covenant that said lots may be used for residential purposes only and may not be used for business or commercial purposes. The court reasoned that any rental of the property, regardless of length or whether the use is residential in nature, is a commercial use under the covenant. The opinion is unpublished, so it is not binding precedent, but Michigan courts may consider unpublished opinions for their persuasive value. It matters most to HOAs whose restrictions use similar language.

Facts

The Birch Lake Subdivision in Elk Rapids Township has 37 lots, platted in 1967 and burdened by recorded restrictions that all lots be used for residential purposes only and not for business or commercial purposes. In July 2022 the association recorded a notice of claim under the Marketable Record Title Act to extend the restrictions another 40 years. The owner moved to an assisted living facility in October 2022, and in 2023 her family listed the home for rent. The association warned that renting was a commercial use. The owner signed a nine-month lease anyway, intending to use the rent to cover her care costs. The association sued for a declaratory judgment, and the trial court granted it summary disposition.

What the Court Held

• Two separate restrictions. The covenant barred non-residential use and, separately, barred business or commercial use. Even if a long-term tenant's use is residential, renting for money can still be commercial.
• Rentals of any length. Relying on earlier decisions, including Eager v Peasley, 322 Mich App 174 (2017), on short-term rentals and an unpublished 2017 case on long-term rentals, the court concluded that any rental of the property violates a covenant prohibiting commercial use.
• No waiver on these facts. The owner argued the association had tolerated earlier short-term rentals by other owners. The court compared the earlier violations with the present one under Bloomfield Estates and found the long-term rental a more serious, continuous violation, and noted the association had been contacting buyers and owners about the rule and had warned this owner in advance.
• Tenant protected. The trial court let the current tenant finish the lease term.

Limits of the Decision

The result depends on the covenant's wording. A restriction that says only "residential purposes" without a separate ban on commercial or business use may be read more narrowly, and the trial court here said long-term rentals alone would not violate a residential-only clause. The case also turned on the association's consistent enforcement. Because the opinion is unpublished, other courts are not required to follow it.

Board Action Checklist

• Read the exact words of your restrictions. Look for "residential purposes only," "business," "commercial," "rental," "lease" and "transient."
• Enforce consistently. Document every rental inquiry, warning and response. The association's proactive outreach was important to rejecting the waiver argument.
• Notify buyers and agents. Include rental restrictions in resale disclosures and welcome letters.
• Preserve your restrictions. If your documents are old, confirm they are protected under the Marketable Record Title Act. See our MRTA guide.
• Do not discriminate in enforcement. Apply rental rules the same way to all owners, and keep fair housing and the new source-of-income rules in mind for any approval process.
• Talk to counsel before suing. Enforcement cases are fact-specific and expensive.

For related rental issues, read short-term rentals in Michigan associations and our violation procedures guide.

How APM Helps

APM tracks rental registrations, sends compliance notices, and keeps enforcement records. See our Michigan resources or contact us.

Source: Timber Lake Drive Property Owners' Association v Gribi, Mich Ct App No. 369520 (September 18, 2025) (unpublished per curiam). This article is general information, not legal advice. Last verified October 24, 2026.