Schack v. Property Owners Association Of Sunset Bay
555 S.W.3d 339 (2018)
Nature Of The Case
This section contains the nature of the case and procedural background.
Facts
Raub (D) bought a tract of land in Sunset Bay in 2007. Ps bought an adjacent tract in 2010. Both lots were subject to a set of real estate covenants for the Sunset Bay subdivision which is called Sunset Bay's Declaration of Covenants, Conditions, and Restrictions (Declaration). In January 2012, Raub (D) began constructing a three-story, seven-bedroom house on his tract with the intention to rent the Property to groups of vacationers. Ps have not built a house on their tract, which remained vacant at the time of trial. Raub (D) posted the Property to the website 'Vacation Rental By Owner,' or VRBO.com, to advertise its availability. The Property was completed in August 2012, and the next month, Raub (D) began renting it out on a short-term basis. On June 19, 2013, Ps sent a letter to the POA's president (D) contending that Raub's (D) rentals violated the Declaration: “Permitted Uses. The Property described above, together with any tracts subsequently added by the Declarant as aforesaid, are intended for one single-family dwelling unit per 'Lot' and their use is restricted to that purpose. . . . Occupancy of a Lot shall be limited to one (1) family, which shall be defined as any number of persons related by blood, adoption or marriage living with not more than one (1) person who is not so related as a single household unit, or no more that [sic] two (2) persons who are not so related living together as a single household unit. . . . No commercial enterprise of any sort shall be situated on any tract included therein unless the Declarant chooses, in his sole discretion, to designate a tract commercial.“ The POA (D) sent a letter instructing Raub (D) to stop leasing the Property to short-term renters. POA (D) reversed course and took the position that short-term rentals did not violate the Declaration. In November 2013, the POA's (D) board of directors went so far as to adopt an 'Interpretation and Clarification' of the Declaration, in which the board stated its belief that short-term rentals did not constitute a prohibited 'commercial enterprise.' However, no formal amendment to the Declaration was adopted by the POA (D). Raub (D) modified his rental agreement to include a notice that 'only groups that are classified as a single-family in accordance with [the Declaration] can rent our house.' Raub (D) testified that if he learned that a group of renters did not consist of a single family, he would not rent the Property to them. P filed this suit against Ds. On April 5, 2016, the parties proceeded to a seven-day jury trial. Raub's (D) VRBO advertisement did not mention that occupancy of the Property was to be limited to one family or two unrelated persons living together as a single household unit. The trial court excluded as hearsay content from Raub's (D) VRBO page: a section of reviews and comments by Raub's (D) guests. P claimed the customer comments show that many of Raub's (D) guests did not meet the definition of family. One user described a couples' retreat, at which a group of nine different couples stayed at the Property. Another user described a stay by a group of eighteen individuals from 'five families.' Ds got the verdict and P appealed.
Issues
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Holding & Decision
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Legal Analysis
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