The waiver holding, which is the operationally important one

Gribi argued the association had waived enforcement by tolerating earlier sporadic short-term rentals in the subdivision. The panel rejected it, reasoning that the long-term rental was a “more serious” and continuous violation than the ones previously tolerated.

That reasoning cuts in a direction that affects Michigan boards. It does not say prior non-enforcement is irrelevant — it says a more serious violation of the same covenant is not waived by tolerance of a lesser one. The corollary is unattractive: an association that has tolerated a comparable violation is in a materially worse position, and the comparison is the fight.

What this means for a Michigan board reading its own documents

• “Residential purposes only” may reach far more than you assumed. If the reasoning holds, it reaches any lease for consideration — a snowbird's winter tenant, a corporate relocation lease, a family renting out a parent's house while the parent is in care.
• That breadth is a liability as much as a tool. A board that starts enforcing against ordinary long-term leases on this authority is acting on an unpublished opinion, against owners who almost certainly bought without notice of that reading, and in a subdivision that has probably tolerated leases for decades. The waiver argument that failed for Gribi is much stronger where the tolerated conduct is identical.
• Voluntary associations have limited control of enforcement. Where any lot owner may enforce, a board's decision not to pursue a violation does not end the matter, and the association may find itself funding a defence in a suit it did not authorise.

How it sits with the rest of Michigan's covenant law

Awkwardly, which is the honest answer. Three months before Timber Lake Drive, the Michigan Supreme Court split 3–3 on whether a “single family residence purposes” covenant even bars short-term rentals, with three justices prepared to say it does not unambiguously do so.

So Michigan now has a Supreme Court that could not muster a majority to hold that such a covenant bars an Airbnb, and a Court of Appeals panel holding that a differently worded covenant bars a nine-month lease. Both are current. Neither binds.

What to watch next

Whether any panel picks up the “rental for consideration is commercial” reasoning in a published decision. Until one does, an association relying on Timber Lake Drive against a conventional lease is relying on persuasive authority in an area where the Supreme Court has already shown it is divided.