The Supreme Court of Indiana upheld a permanent injunction against a couple who rented their lakefront home to summer vacationers on five occasions, earning $16,559 from rents that averaged more than $479 per night. The Town of Ogden, a community on Lake Michigan that is surrounded by the Indiana Dunes National Lakeshore, filed suit to stop the rentals and levy fines against Steven and Lauren Siwinski, arguing that short-term rentals violated a town ordinance that prohibits commercial use of property in a residential district.
The dispute revolved around the plain meaning of the ordinance, which defines a single-family dwelling as “a separate detached building designed for and occupied exclusively as a residence by one family.” The Siwinskis argued that short-term rentals comply with the zoning ordinance, because their home was used by only one family at a time. The town argued that the ordinance allows a dwelling to be used by only one family as a residence, and does not permit rentals.
The trial court granted summary judgment and injunctive relief to the town, and entered a $40,000 judgment against the Siwinski’s. The Court of Appeals reversed. The Supreme Court affirmed the trial court’s ruling, but held that the fine could be no more than $32,500.
Pointing to the plain meaning of the statute, the high court held that the ordinance forbids rentals in a residential district because it defines single family dwellings as dwellings that are occupied exclusively as a residence by one family. The court further noted that the town has authority to forbid such summer rentals, to ensure that renters don’t overwhelm the residential district during the summer season.
However, the high court reduced the fine, which was based on the Siwinski’s profit and the town’s legal fees, holding that the town had no statutory right to attorney’s fees. A state statute permits maximum fines of $2,500 for a first violation of a local ordinance, and $7,500 for a second or subsequent violation, so the court remanded the case with the instruction that the Siwinski’s may be fined no more than $32,500.
Siwinski v. Town of Ogden Dunes, 949 N.E.2d 825 (Ind., 6/29/2011)
The opinion can be accessed at: http://www.in.gov/judiciary/opinions/pdf/06291102shd.pdf
