An Ohio court just held you cannot ban short-term rentals by bylaw
An Ohio court just held you cannot ban short-term rentals by bylaw
2026-09-15 · Ohio · Courts
On August 13, 2026 Ohio's Fifth District Court of Appeals reversed a judgment of $57,386.72 against three homeowners and held that their association could not create a short-term rental ban by amending its bylaws. This is the most consequential Ohio association decision of the year.1
Rudy v. Apple Valley Property Owners Association, 2026-Ohio-3153, Case No. 25CA000021, arose in Knox County. Three owners had run Airbnb and VRBO rentals since between 2016 and 2020, using the association's own “Intent to Rent” form — a form that listed daily, weekly, VRBO and Airbnb among the permitted rental types.
Between April and June 2024 the board put bylaw amendments to the membership banning rentals of less than six months from 2026. The owners sued for a declaration that only the Residential Declaration, not the Bylaws, could impose such a restriction. The association counterclaimed under R.C. 5312.13 and won below, taking stipulated damages, fees and costs of $57,386.72.
The court reversed across the board
On what the documents actually said:
“Neither the Residential Declaration nor the Bylaws, prior to their amendment, expressly or implicitly prohibited the Homeowners from using their homes for short-term or long-term rentals.” (¶ 28)
On whether short-term renting is a commercial use — the argument associations across Ohio have been running for a decade:
“Whether owner-occupied or rented for a weekend, the Homeowners' properties remain 'residences.'…The Homeowners' homes were being used for residential purposes; no business was being conducted 'on the premises.'” (¶ 31)
On the board's claim that it could interpret its way to a ban:
“the AVPOA cannot be accorded 'broad authority' to interpret the Residential Declaration to create a ban on short-term rentals where the language contained in the Residential Declaration does not support such a ban” — quoting Woodcreek Assn. v. Bingle for the proposition that an association “does not have the discretion to unilaterally create restrictions where none exist.” (¶ 39)
And the sting in the tail:
“We find that the AVPOA breached that contract by amending the Bylaws to impose a restriction on the Homeowners' short-term renting of their properties when no such restriction existed in the Declarations.” (¶ 52)
The association's R.C. 5312.13 damages award was vacated and the owners' own claim for fees under the same section was revived.
Which instrument carries a restriction decides whether it binds. Our Ohio governing statute page explains how declarations and bylaws differ in Ohio.
What this actually decides, and what it does not
It does not hold that Ohio associations cannot restrict short-term rentals. They can. The holding is about which instrument does it and by what procedure. A rental restriction belongs in the recorded declaration, adopted through the declaration's own amendment provision — which typically means a supermajority of owners and a recorded instrument, not a bylaw vote.
That distinction has been available in Ohio law for years and has been widely ignored, because amending bylaws is so much easier than amending a declaration. Boards took the easy route. The Fifth District has now priced it. Our Ohio short-term rentals page covers the amendment mechanics that do work.
The reversal of exposure
Read the sequence again from a board's point of view. The association won at trial and collected a judgment of $57,386.72. On appeal it lost the judgment, lost its fees, had its counterclaim vacated, and now faces the owners' own R.C. 5312.13 fee claim — because the association's enforcement of a restriction it had no power to create was itself the breach.
R.C. 5312.13 cuts both ways. An association that complies with its recorded documents can use it. An association that does not comply with them can be used by an owner under the same section. Boards that think of 5312.13 as an enforcement tool should read Rudy as a reminder that it is a compliance obligation first.
The evidence that hurt the association most
The association's own “Intent to Rent” form listed daily, weekly, VRBO and Airbnb as rental types. For years the association had processed short-term rentals through its own paperwork. That is not a technicality. It is the association's contemporaneous reading of its own documents, in writing, on a form it drafted.
A board's forms will be read against its restrictions. A rules document that permits what the declaration is said to forbid is an exhibit waiting to be attached to someone's summary judgment motion.
What to do if your ban is in the bylaws
Find out which instrument your restriction is actually in. Many Ohio boards do not know. “It's in our rules” and “it's in the declaration” are different answers with different consequences, and the second one is the only one that survives Rudy in the Fifth District.
Stop enforcing a bylaw-only ban while you fix it. Continuing to fine or sue on a restriction of doubtful validity is the exact conduct that turned this association from plaintiff to defendant. Pause enforcement, get advice, and put the amendment to the members properly.
Amend the declaration, and expect it to be harder. The supermajority threshold in a declaration exists precisely because the restriction runs with the land and binds successors. That is the point. A restriction adopted at that threshold is the one that holds.
Grandfather deliberately, not accidentally. Owners who bought and invested in reliance on a permissive regime are the sympathetic plaintiffs in every one of these cases. An amendment that phases in, or that exempts existing operators, removes most of the litigation risk and usually passes more easily.
Status note: the decision is from August 13, 2026 and no Supreme Court of Ohio jurisdictional entry had appeared as of September 15, 2026. The appeal window may still be open, so this is current appellate authority in the Fifth District rather than a settled statewide rule.
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