Why Our Covenants Matter
Your property at Scientists’ Cliffs has a “restrictive covenant” dating back to the earliest days of the Association, which says that property shall not be used for any business purpose. What is a “restrictive covenant”?
A restrictive covenant is a binding legal document that places restrictions on what an owner can do with property. Its restrictions are intended to enhance the peaceful enjoyment of property by all members of a community. The covenant is tied to the property and not to the owner. A covenant that passes from one owner to the next owner is said to “pass with the land.” Unless there is a specific termination date, a restrictive covenant lasts indefinitely.
At Scientists’ Cliffs, we all share a restrictive covenant against commercialization of our properties. And that protects all of us.
The board will soon ask you to vote for its proposed Rule 12. We believe that a rule cannot apply to a restrictive covenant. If it did, it would compromise the protection of our original covenant, and lead to more Airbnb/VRBO-type rental properties at Scientists’ Cliffs. We propose the following:
Petition To Oppose Rule 12
In Rule 12, the SCA board recognizes the original covenant in all our deeds which states that property shall not be used for any business purpose. The board acknowledges that the original intent of this covenant was to create and maintain a cohesive residential community. By granting an exclusion to the owners of five properties, the board undermines the intent of the very covenant it acknowledges.
Concerned that this exclusion sets a precedent, we discussed Rule 12 with an attorney. He warned that “Granting a business exemption to five (5) members will undoubtedly lead others to demand and be granted an equal right. Those properties which have expanded rights will have a financial advantage at the expense of all other property owners.”
Our attorney explained that this issue already is, and should be, addressed by a Covenant and not a Rule. He recommended that the most effective way to stop the proliferation of Airbnb/VRBO-type rentals at Scientists’ Cliffs is to update our covenant.
Our attorney then drafted a counterproposal to Rule 12, updating our covenant by aligning it with current Maryland law which establishes that Airbnb/VRBO rentals are businesses subject to Maryland sales tax. All that is needed is approval of a one-sentence addition to our covenant.
Please note that traditional rentals of any length, including those to friends and family, are not subject to Maryland sales tax and therefore would be allowed to continue. Owners of five residences currently operating through Airbnb/VRBO would be given one year to wind down their business rentals.
Our Petition To The SCA Board of Directors upholds our covenant and requires the current operators of Airbnb/VRBO rentals to abide by the same covenant as everyone else. We ask you to approve the Petition.
Please click on this link to access the Petition:
