Three arguments the neighbours lost

“The drafters could not have anticipated Airbnb.” The district court's answer, quoted with approval: “While it is unsurprising that CC&Rs from 1979 do not directly address the issue of Airbnb or VRBO rentals, had the drafters of the CC&Rs intended to limit short-term rentals they certainly could have done so.” The parties discussed at the hearing that short-stay accommodation — bed-and-breakfast arrangements, for one — existed in 1979. The homeowners offered no evidence of the drafters' intent.

“A 2002 judgment settled this for the subdivision.” The neighbours attached a 2002 district-court judgment barring nightly rentals in Swan Shores. It was entered on a stipulation, with no finding about the covenants by that judge. The Court of Appeals declined to treat it as either binding or persuasive: there was no evidence that any party to that stipulation drafted paragraph 6, and the Court would not read a settlement between other parties as evidence of drafters' intent.

“Paying Airbnb a fee and complying with county ordinances makes it commercial.” The Court held that the parties' conduct showed only competing interpretations, not the drafters' clear intent — leaving the district court with the language alone.

The Court also made an analytic point that matters for drafting: a finding of ambiguity is not a licence to search for a prohibition. As the district court put it, an ambiguous provision “is also a clear expression restricting the use of property. It is not.” Unresolved ambiguity is itself the answer — free use.

Fees, and how the neighbours earned them at oral argument

This is the part a party should read before deciding how to argue an Idaho covenant appeal. The Court awarded the Pikes attorney fees under Idaho Code § 12-121 limited to the costs associated with oral argument, plus costs on appeal.

Why only oral argument: at that hearing the homeowners' appellate counsel argued for the first time that paragraph 6 was ambiguous and that the district court should have refused both parties' Rule 12(c) motions and held an evidentiary hearing. Counsel conceded that trial counsel had argued the opposite. The Court held that an appellate lawyer's disagreement with trial counsel does not preserve a new argument; that a party who files its own Rule 12(c) motion cannot complain the court ruled on it (invited error, Thomson v. Olsen); that I.R.C.P. 12(d) was available if more evidence was wanted; and that “[o]ral argument is not the time or place to request an alternate remedy that was never requested in the trial court and was not requested in the briefing.”

What it means for Idaho associations

• Generic commercial-use clauses do not reach short-term rentals. After Pinehaven and now Delano, an association relying on a mid-century “no business or commercial activity” paragraph to stop nightly rentals is relying on language two Idaho appellate courts have said does not do that job.
• A permissive clause is worse than silence. Paragraph 6 did not merely omit rentals; it affirmatively preserved “private renting,” and the neighbours could not persuade the Court to read a duration limit or a marketing-channel limit into that phrase.
• Express language is the only reliable route — and in Idaho that route now runs through Idaho Code § 55-3211², which requires the affected owner's written consent before a rental restriction may be added, amended or enforced. Clear drafting and statutory consent are two separate hurdles, and an association needs both.
• Old stipulated judgments are not precedent. Subdivisions often carry one. It binds the parties who signed it and proves nothing about what the covenants mean.