My name is Dan, and I have been an avid listener since late last year, and made my first jump into real estate/STR this year after holding off for some time. I am in a bit of a sticky and rare situation which has been holding me back from proceeding with starting my short term rental. I would love the insight from other professionals and community members on the situation. I believe I have a strong case, but I'd like some opinions as it will be difficult for me to continue paying the mortgage on the property month after month if the other parties try to stretch this out and postpone.

A quick background:

I bought a 100-year old house in upstate NY overlooking Lake Ontario with its own private beachfront. The property is absolutely beautiful, and the house has so much character. It is the perfect setting for a great short-term rental, and the numbers have been run dozens of times to support the investment. Prior to buying the home, I made my plans to short term rent the property aware to the real estate agent, the bank, called the town in advance to make sure there were no restrictions, and had verified there was no HOA which could impose any restrictions.

Short Term Rental:

The town requires a permit to be granted since the zoning of the property is Resort. I had put in the application, and it was granted without issue as I had made sure all criteria was addressed for the town.

Background on Community:

The community is tight knit, and many members have been there for multiple generations. Proper to it being residential, in the late 1800's, there was a hotel on the grounds. After the hotel dissolved, a corporation was put in its place, and there was a deed which was set onto the land to restrict any activity/business such as there was prior with the hotel in the early 1900's.

The Dilemma:

As soon as I put in an application for the Short-term rental permit, members (corporation shareholders) of the area had presented a part of my deed dating back to 1922 which states, "may not be used as a boarding house, or any mercantile or mechanical use". This document was not in my abstract, and the lawyers mentioned that part of the deed was not in their findings. The town confirmed that all they can do is issue a permit, but if there is a covenant that specifically restricts specific actions, the covenant supersedes the towns permit. Some community members are stating that because of this covenant, my plan for short-term renting is restricted. As much as they phrase "to their best knowledge that is what is means" I believe it is mostly to keep the community as private as it is, which is understandable from a personal perspective.

My Findings:

1. Time/Wording
- The deed is 100 years old, and the wording is potentially inexact

2. Specified Restrictions

- States there cannot be a boarding house. A boarding house is obviously classified differently from a single family rental.

3. Prior Similar Actions

- Other properties on the premises have been rented in the past to friends and family. To my knowledge, if restricted actions are not followed consistently, a covenant may be unenforceable.

4. Notice and Enforceable Right

- There was no notice given of any restrictions until I filed for a permit. I had even asked one of the head members of the community if there were any restrictions, or an HOA, and it was confirmed that there is not.

5. Local Zoning

- The town in which the property resides also classified a single family resident short term rental differently than they do a boarding house.

As much as this could be a case where the title company did not do their full work, and if there is title insurance, there is a chance this can get resolved on their end/ have the property sold. However, this was a very unique property, and I would prefer to keep it.

I'd be happy to provide any additional information, or go more into depth regarding the topic.

Thank you everyone for your time!

Upstate New York, New York

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