Thursday, October 6, 2011

Indiana Town Loses Short-term Rental Lawsuit

March 17, 2010

The town of Ogden Dunes cannot stop homeowners who want to rent out their property for periods of less than a month, the Indiana Court of Appeals ruled Tuesday.

In 2007, the Porter County town of 1,300 people decided to stringently enforce its residential zoning code, which the town claimed prohibited short-term home rentals. The goal was to prevent the lakefront community from becoming a resort area.

Later that year, the town accused Steven and Lauren Siwinski of renting out their beachfront home five times that summer, essentially using their residence for a commercial purpose, which is prohibited. The town sought a $2,500 fine for each day the home was rented.

Porter Superior Court Judge Mary Harper ruled in favor of the town in June.

However, the appeals court found that -- because the zoning ordinance does not specifically prohibit short-term rentals and because the rented home is being used in a residential manner -- short-term rentals do not violate the zoning ordinance.

"Nothing in the designated evidence established that any commerce or other activities not associated with a residence were ever conducted on the Siwinskis' property," wrote Judge James S. Kirsch in the court's 3-0 decision.

The decision reversed a fine of $40,000 the town imposed on Steven and Lauren Siwinski for offering their $1 million home in the small beachfront community for short-term rentals.

"We are pleased that the Court of Appeals has clarified what always appeared clear to my family: If the town wants to ban short-term rentals, then the town should pass an ordinance that specifically bans them," Steven Siwinski said.

Siwinski, a mortgage broker, sued the town in federal court in 2008, claiming that the town allowed short-term rentals for years. Siwinski said he and his wife were targeted by the town because they were part-time residents.

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