Can You Turn Your Michigan Lake House into a Short-Term Rental?

If 2020 and 2021 have taught us anything, it is how important it is to get away from home sometimes. Many Michigan families own property up north or on the lakeshore. These homes away from home can provide a great get away, but they often sit empty for months of every year. That could lead you to wonder whether you can turn your Michigan lake house into a short-term rental through sites like AirBnB, VRBO, or Home-Away.com. The answer depends on the local ordinances, and the language in your deed.

Local Ordinances Against Short-Term Rentals

The first step in determining whether you can turn your lake house into a short-term rental is to look at where it is located. Many Michigan municipalities have updated their zoning ordinances in the face of increasing use of AirBnB and similar websites. These new zoning laws may specifically ban or restrict the use of single-family dwellings as short-term rentals. If your property is zoned as residential, these local ordinances could make it illegal for you to list your home on VRBO or other short-term rental sites.

In at least one Michigan case, Reaume v Spring Lake Township, the court didn’t even require the ordinance to be on the books before rentals began. The judges in that case said that the term single-family dwelling “unambiguously excludes transient or temporary rental occupation.” That meant the property owner was already violating the zoning laws before the explicit ban on short-term rentals was passed.

Restrictive Covenants in Homeowners’ Deeds

Once you determine whether your city, township, or municipality allows short-term rentals, you need to look closer – at the deed to your property. Many properties that are sold as part of a homeowners’ association have a “restrictive covenant” written into the deed, limiting the use of the property. These restrictive covenants and the homeowners associations that enforce them could have rules against establishing short-term rentals on the property. Restrictive covenants are enforceable as long as they don’t discriminate against specific categories of people.

In another Michigan case, Eager v Peasley, one neighbor sued another after she began renting her lake house on Home-Away.com. The lake house had a restrictive covenant in the deed limiting its use to “private occupancy” and prohibiting “commercial use.” The judges in that case said that short-term rentals are not a residential purpose, since the people who visit never intend to be there permanently. Similarly, the ban on commercial use included short-term rentals since the homeowner was making money from renting out her property. Since the short-term rentals violated the restrictive covenants within the lake house’s deed, the neighbor could prevent the property owner from posting her lake house as a vacation rental.

Get Legal Advice Before Listing Your Lake House as a Short-Term Rental

Michigan law doesn’t make it easy for property owners to list their homes as short-term rentals and make money through websites like AirBnB. That’s why you should speak to a real estate attorney before you publish your listing. A real estate attorney can review the local zoning ordinances and any restrictive covenants on your deed to determine whether there is anything stopping you from making money from your lakeshore property as a vacation rental. If there is a question of whether your property can be listed on AirBnB or VBRO, a real estate attorney can also help you negotiate with your homeowners association to avoid an expensive lawsuit later on. If you are a developer hoping to convert your property into a bed & breakfast or other commercial real estate venture you may be able to apply for a variance to local zoning ordinances. These variances are often granted on a case-by-case basis, so having an experienced attorney advocate on your behalf can be essential.

At Lachman King, our real estate attorneys have been landowners on Lake Michigan for years. We understand the limits Michigan law places on short-term rentals and can help you determine if there are any barriers to you turning your family lake house into an income property. We have a heart for the Great Lakes and an understanding of the federal, state, and local laws that affect the property rights of Great Lakes property owners. Our team will meet with you to explain your rights, and help you make the right call before you list your lakeshore property as a short-term rental. Contact us today to set up a meeting.

Riparian Rights on the Great Lakes: Who Owns the Shore?

Michigan has thousands of miles of shoreline, on the Great Lakes and over 10,000 inland lakes, rivers, and other bodies of water. However, limits on Great Lakes riparian rights can affect the way you use and develop your property, and which government you must approach before building a dock, wharf, or privacy fence on your property.

Riparian Rights on the Great Lakes: Who Owns the Shore?

What are Lakeshore Owners’ Riparian Rights?

If your property buts up against a natural body of water, then you have “riparian rights” related to its lakeshore or riverfront status. (Artificial canals or water access routes don’t count). If your property includes riparian rights, you may:

  • Use the water for swimming, fishing, waterskiing, ice-skating, diving, etc.
  • Build a dock or wharf to improve your use of the water (after obtaining a permit from the State of Michigan)
  • Access navigable water
  • Use any part of the surface of the water as long as your use doesn’t unreasonable interfere with your fellow property owners’ use (i.e. boating or waterskiing over the whole lake or canoeing down the length of the river)

Generally, who has riparian rights is a question of land ownership. However, you may also have an “easement” to lake access or other riparian rights on property owned by someone else. For example, your lakefront cabin may have come with an easement or license to use the common boat launch controlled by the lake’s property owners’ association.

Great Lakes vs Inland Lakes: What’s the Difference?

Your rights as a lakeshore property owner in the Great Lakes are slightly different than if you owned waterfront property on an inland lake or river. Riparian owners generally own the submerged land under the river or lake out to the center of the body of water. If you owned property on a perfectly circular inland lake, each piece of property would have a pie-wedge of submerged land extending out to the middle of the lake.

However, riparian rights work differently if your lakefront property abuts Lake Michigan, another Great Lake, or other federally “navigable” waters that can be travelled by vessels (including larger rivers). As a riparian owner on these bodies of water, you may not impair vessels’ ability to navigate the waterway. Most importantly, your dock or wharf cannot extend into the navigable part of the waterway. Even shorter docks and structures must be permitted through the U.S. Army Corps of Engineers, rather than the State of Michigan.

In addition, the State of Michigan holds the title to the center of each Great Lake that touches it. Unlike with inland lakes, ownership of lakeshore property on the Great Lakes generally only extends to the ordinary high-water mark, vegetation line, or beach shoreline, sometimes called the “wet sand line.” When long-term weather or climate change causes the level of the Great Lakes to rise or fall, this can cause lakeshore properties to get larger or smaller as the ordinary high-water line recedes or encroaches on that property. Whatever is regularly submerged at high tide belongs to the State.

Private Rights to Maintain Great Lakes Shoreline

Since 2003, Michigan has modified some laws relating to riparian owners’ right to groom or maintain their beachfronts. Before 2003, landowners needed a permit from the State to remove unattractive vegetation or change the shape of the beach. There have been several changes, over the years. However, now, Great Lakes property owners maintaining sandy or rocky beaches no longer need a permit to:

  • Level sand
  • Mow or remove vegetation
  • Groom soil
  • Remove debris

However, the Army Corp of Engineers may still require a permit, for some activities that could affect navigability or shoreline preservation efforts.

Public Use of Beaches on Shoreline Properties on the Great Lakes

Since the State owns up to the high-water line, it holds these properties as a “public trust,” giving the general public the right to use everything below that high point. A lakeshore property owner can’t do anything to obstruct that right – such as building a fence or gate below the ordinary high-water line. This can create privacy and security concerns for some lakefront property owners.

Get Clarity on Great Lakes Riparian Rights

If you are seeking to secure your property, or if you have questions about maintenance or submerged land use, you should speak to a real estate attorney who knows the ins and outs of lakeshore law. At Lachman King, we have been representing developers and landowners on Lake Michigan for years. We have a heart for the Great Lakes and an understanding of the federal, state, and local laws that impact riparian rights of Great Lakes property owners. Our team will meet with you to explain your rights, and help you make the right call for developing and using your lakeshore property. Contact us today to set up a meeting.