WI Supreme Court Affirms the Voiding of Injunction Against Property Used for Short and Long-Term Rentals

This post was authored by Matthew Loeser. Esq.

Lee and Mary Jo Neuschwander purchased property on Hayward Lake in Hayward, Wisconsin. The Neuschwanders renovated the large house and began renting it to vacationers on both short-term and long-term bases. Several neighboring property owners objected to the use of the property as a vacation rental, and brought suit in Sawyer County Circuit Court, claiming that a restrictive covenant that encumbered all lots in the subdivision, which encompassed Neuschwanders’ property, precluded short-term rentals of property. The Sawyer County Circuit Court held in favor of the Neighbors and enjoined Neuschwanders from further short-term rentals. The Court of Appeals reversed.

The restrictive covenant at issue provided “there shall be no commercial activity allowed on any of said lots.” The court found that a wide range of activities could potentially constitute “commercial activity”. Since this restrictive covenant was determined to be ambiguous, the court resolved the conflict in favor of the property owners’ ability to use their property freely. In further support of this conclusion, the court referenced the first homeowner in the subdivision, Louisiana Pacific, which also used the property for short and long term rentals. Accordingly, the Court of Appeals decision voiding the injunction issued by the circuit court was affirmed.

Forshee v Neuschwander, 2018 WL 2709837 (WI 6/5/2018)