## Facts

- Shanty Creek is a resort development in Antrim County, Michigan; the Valley View subdivision contains 56 residential lots subject to a recorded declaration of restrictions (1968, amended 1970).
- The restrictions limited each lot to “residential purposes,” “one single dwelling,” and “a single, private dwelling … occupied by not more than one (1) family, for residence purposes only,” plus a private garage.
- Resort Custom Builders, Inc. built a home on Lot 7 in Valley View and, after failing to sell it as a whole, adopted an “interval ownership” plan.
- The interval ownership declaration contemplated selling week-long occupancy intervals (up to 48 weeks per year, reserving four weeks for maintenance), granting each purchaser an undivided interest, and allowing participation in exchange programs to trade occupancy.
- Interval ownership was expressly authorized for certain condominiums elsewhere in the resort, but Valley View’s restrictions did not mention timesharing or interval ownership.
- Some Valley View homes were rented short-term, and some were jointly owned, but plaintiffs asserted the proposed interval scheme would change the subdivision’s residential character.
- Lot owners and the Shanty Creek Lodge Association sued to enjoin sales of interval interests as violating the restrictions; the trial court granted an injunction, the court of appeals reversed, and the Michigan Supreme Court granted review.

## Issues

1. Whether a timeshare-style interval ownership plan for a home violates restrictive covenants limiting each lot to a single private dwelling occupied by not more than one family for residential purposes.
2. Whether the restrictions’ silence on timesharing permits interval ownership despite qualitative limits on use.
3. Whether interval ownership is materially different from short-term rentals or ordinary joint ownership when evaluating compliance with single-family residential covenants.

## Decision

- The Michigan Supreme Court reversed the court of appeals and reinstated the trial court’s injunction.
- The Court held the proposed interval ownership arrangement violated the Valley View restrictions limiting use to a single private dwelling occupied by not more than one family for residential purposes.
- The Court concluded the covenants restricted not only the structure but also the manner and pattern of occupancy, and the developer’s plan constituted a prohibited use.
- Injunctive relief was proper because the restrictions authorized lot owners to seek equitable enforcement to prevent violations.

## Legal Principles

- Restrictive covenants are interpreted by their plain language to effectuate the intent expressed in the instrument; clear limitations defining a subdivision’s residential character are enforceable.
- Covenant language limiting a lot to a “single, private dwelling” occupied by “not more than one family” may impose qualitative limits on use and occupancy patterns, not merely on the physical building.
- A commercially structured interval ownership program involving numerous rotating owners and predictable high-turnover occupancy can be inconsistent with single-family residential covenants even if, at any given time, only one family occupies the dwelling.
- Silence in the covenants about timesharing does not negate an otherwise applicable single-family residential limitation; where drafters intended to permit interval ownership, they can do so expressly.
- Short-term rentals or ordinary co-ownership do not necessarily equate to timesharing; courts may treat timeshare-style arrangements as a distinct, more intensive use altering the subdivision’s residential character.

## Conclusion

The court held that selling week-based interval ownership interests in a subdivision restricted to single-family residential use violated covenants requiring a single private dwelling occupied by no more than one family, and it reinstated an injunction barring the interval ownership sales.


O’Connor v. Resort Custom Builders, Inc., 459 Mich. 335, 591 N.W.2d 216 (Mich. 1999)