Editor’s note: This article was updated on June 13, 2024, at 2:20 pm to reflect that Judge Richard Wetzel did not halt voting on the bylaws changes but restrained the Apple Valley POA from implementing any changes.
MOUNT VERNON — Knox County Common Pleas Judge Richard Wetzel on Monday restrained the Apple Valley Property Owner’s Association from implementing any bylaws changes relating to short-term rentals.
The bylaws amendment restricts short-term rentals of less than six months. Voting is underway, and the POA had planned to announce results at its June 22 annual meeting.
Wetzel granted a 30-day temporary restraining order (TRO) that 16 Apple Valley property owners filed against the association on May 29.
The property owners contend that the AVPOA board must amend the Declaration of Restrictive Covenants, not the bylaws. They say the association is trying to circumvent this requirement.
The POA believes that the bylaws authorize it to adopt rules and regulations in the best interest of the association and its members and enforce the covenants and restrictions.
Enforcement encompasses property use limitations, including restrictions on short-term rentals of less than six months.
Amending the covenants requires a vote of two-thirds of Apple Valley property owners. Amending the bylaws requires a majority vote.
In granting the TRO, Wetzel said he was having trouble with the authorization source for the association to impose bylaws and restrictions.
“What is the harm to the association if the court says it cannot vote if the amendment doesn’t take effect until 2026?” he asked.
Under the TRO, the POA has 14 days to file documentation on the authorization source. It also must file each of the restrictive covenants. The property owners have 14 days to respond.
Wetzel said he could extend the TRO if needed.
At the June 22 meeting, the POA can tabulate and announce votes on the POA director positions.
“All I am restraining is the change in the bylaws relating to property use,” Wetzel said.
Gambier Village Council passed an updated zoning code last year that permits short-term rentals with conditions.
Plaintiffs’ view
Apple Valley has 18 restrictive covenants, one for each section as the community developed. Legal counsel agreed they are substantively identical except for Fairway Hills.
Fairway Hills allows for a measure of commercial activity.
None of the property owners live in Fairway Hills.
Restrictive covenants run with the land; bylaws do not. The property owners believe that amending the bylaws instead of the restrictive covenants is a breach of contract.
The plaintiffs contend the covenants do not prohibit leasing homes in Apple Valley. They note that properties have been used as short-term rentals (STR) since Apple Valley was established in 1970.
Court documents reference that the POA’s Intent to Rent form acknowledges yearly, monthly, weekly, daily, and Vrbo, Airbnbs, etc. rentals. Tenants with over a six-month lease may receive associate membership privileges.
The plaintiffs rent their properties as short-term rentals and claim they will suffer irreparable harm if the bylaws are unlawfully amended.
In addition to the TRO and asking the court to declare that the Declaration of Restrictive Covenants is the proper contract to amend, the plaintiffs seek monetary judgment for court and attorney fees and other expenses related to the case.
Property owner and lead plaintiff Alan Rudy testified that customer cancellations due to STR restrictions would cause him to lose his status as a “Super Host” with Airbnb, which takes several years to achieve.
Gahanna attorney Jeffrey A. Dittmer of Dittmer, Wagoner & Steele represented the property owners at Monday’s hearing.
Defendant’s view
POA counsel Adam Landon of Critchfield, Critchfield & Johnston noted in court documents that before this lawsuit, there had never been an assertion that the POA could not enforce property limitations set forth in the declaration through its bylaws.
That includes leasing restrictions to preserve the residential nature of the community.
Additionally, the POA contends that the bylaws amendment does not restrict the plaintiffs from leasing their property. Rather, it ensures longer-term leases that protect the community’s residential nature rather than creating a transient, commercial rental akin to a hotel.
Court documents note the covenants state that all lots not specifically designated shall be used for residential purposes only, and no business, commercial, or manufacturing enterprise shall be conducted on the premises.
“Reside means a common definition to dwell permanently or continuously. Plaintiffs do not contend they occupy their lots, even temporarily, let alone permanently or continuously. The use is transitory and not consistent with ‘residential’ as reasonable definition,” Landon wrote in filing the POA’s opposition to the TRO.
The POA contends that short-term rentals are commercial activities, which are prohibited in 17 of Apple Valley’s 18 residential sections.
“This was founded as a private, residential community, not as a resort,” Landon said at Monday’s hearing.
Referencing a hotel, he said, “Just because you eat and sleep in a hotel does not mean it is a residential accommodation.
Landon said that ultimately the courts will have to decide whether a short-term rental is commercial activity.
Judge Wetzel also noted that the AVPOA could just as easily be the plaintiff if the property owners are not complying with POA rental rules. He acknowledged the POA might have a counter-claim in the future.
