In early February, a new ordinance took effect in the township to ban housing rentals of more than 14 days per year in the R-1 and R-2 zoning districts. Short-term rentals are allowed in the R-3 and R-4 districts with a township-issued license.
On March 2, township residents Randy and Susan Reaume, who have previously rented out their home at 18190 Lovell Road on a short-term basis, applied for a short-term rental license. But township staff denied the application because the Reaumes’ rental home is in an R-1 district, according to Township Manager Gordon Gallagher.
The Reaumes appealed to the Township Board on Monday night, but the board voted 7-0 to direct township attorney Ron Bultje to draft a written response to the Reaumes' appeal, denying it. The board is expected to approve the written response at its May 8 meeting.
Attorney Ed Grafton said if the board formally approves the appeal denial, he expects to file a lawsuit “the next day.”
“If they uphold the staff's decision to deny the permit, Susan (Reaume) will sue in Ottawa County Circuit Court,” Grafton said. “That will be a very expensive proposition for both sides, but at least in Circuit Court the township's functionaries will no longer be judge, jury and executioner on the issue of short-term rentals.”
Grafton said he expects the court case to be comprised of three parts.
“First, Susan will be appealing the board's decision to deny her a short-term rental license,” he said. “Even if Ordinance 255 is constitutional, Susan is entitled to continue her short-term rental activity as a 'grandfathered' conforming use.”
Grafton said Reaume will also seek a declaration that the ordinance is unconstitutional on due process and equal protection grounds, thus it is unenforceable.
“Third, Susan will seek damages of $225,000 that result from an unconstitutional taking of her property rights as a short-term landlord,” Grafton said.
Bultje told the Township Board that he believes the township is on firm legal footing. He said several courts have ruled that short-term rentals are commercial ventures.
Bultje also said the claim of a “taking” is not a valid argument.
“The township would be guilty of taking if the township removed all reasonable use of the property,” he explained. “I don't think you can argue there's no reasonable use of property for a home on Spring Lake. I don't believe the legal arguments advanced to you are legitimate.”
Several township trustees said they believe they thoroughly vetted the short-term rental issue during eight months of discussions and public forums. The approved ordinance took effect Feb. 6.
“We spent an awful lot of time discussing this,” Township Supervisor John Nash said. “The board had a lot of different options as we went through it. We ended up with a unanimous decision, which is very positive.”
Nash and several other board members noted this appeal process was a necessary step before the issue goes to court.
“I think Mr. Grafton's client has every legal right to test this in court,” Nash said.
Trustee Rachel Terpstra said she didn't hear anything during the appeal that made her change her mind.
“Most of the arguments that were presented tonight were presented while we were going through the ordinance,” Terpstra said Monday. “Most of those legal issues were taken into consideration before we passed the ordinance. The reason we're here tonight is so they can take it to court and it's a step we have to take. We should deny and let them proceed.”
To date, no other lawsuits have been filed regarding the township’s short-term rental ordinance, Gallagher said.