Many homeowners that do not reside in their homes full time have benefited from renting them out on a “short term” or vacation basis. However, some homeowners have discovered either prior to purchasing the home or after the fact, that they have deed restrictions or HOA restrictions preventing short term rentals.

Over the years I have had many homeowners or prospective buyers ask me if these deed or HOA restrictions are enforceable in New Mexico. 

I am not an attorney, so to answer this question I refer clients to two previous cases decided by the NM Supreme Court and then to an attorney to see if these cases may or may not apply to their unique situations.

The first case is Mason Family Trust v Devaney which dealt with deed restrictions, in this case Mr Devaney was renting his cabin in Ruidoso on a short term basis to vacationers much to the displeasure of the Mason Family Trust who claimed his doing so violated deed restrictions which required properties in the subdivision to be used only for dwelling purposes and precluded properties from being used for business or commercial purposes.

The court, however, found that under the specific circumstances of this case, Devaney’s short-term rental of his cabin did not violate these deed restrictions. The court's decision was based on a strict and reasonable interpretation of the deed restrictions, concluding that short-term rental for dwelling purposes did not constitute a use for business or commercial purposes. This decision was influenced by the principle of resolving issues of enforcement of a restriction in favor of the free enjoyment of the property and against limitations​.

In the second case, Estates At Desert Ridge Trails v Vazquez. Mr Vazquez was renting out his home on a short term basis in a Albuquerque subdivision that had restrictive covenants in place preventing such use. The HOA argued that the short-term rental of a home by Mr. Vazquez was inconsistent with the single-family residential purposes limitation, comparing it to more of a business such as a hotel.

The court, however, did not agree with the HOA interpretation. It found that the use of the property for short-term rentals did not, by itself, constitute an impermissible business or commercial activity under the "single-family residential purposes" restrictive covenant. The court held that just because Mr Vazquez was receiving an economic benefit does not automatically equate to a business or commercial activity under the restrictive covenant. 

In these two cases, the homeowners prevailed and were not prevented from renting their homes on a short term or vacation rental basis. It is impossible to tell how the court may rule in future cases, but In reading through these cases in their entirety it can be summarized that the court was unwilling to differentiate residential use based strictly upon the time of occupancy. 

Please note that this article is not to be construed as legal advice and the above cases are specific and may not apply in every situation or your situation. If you have specific questions about short term rental permissibility, you are highly encouraged to seek out a qualified real estate attorney. 

 

Real Estate Questions? Feel free to contact me anytime. 

Rob Swan

Qualifying Broker, Swan Realty

575-613-4243