Pennsylvania Supreme Court Denies Hideout Community’s Application For Appeal

In a blow to community Short Term Rental (“STR”) restrictions, on February 12, 2025, the Pennsylvania Supreme Court denied an application for appeal filed by The Association of Property Owners of The Hideout, Inc.(“The Hideout”).  On behalf of certain community members, Timoney Knox’s real estate litigation team opposed this potential appeal and prevailed.  This move by the Supreme Court maintains the law held in the case of Chan, et al., v. The Association of Property Owners of The Hideout, Inc. (“The Hideout Appeal”), where the Commonwealth Court of Pennsylvania reversed the Wayne County Court of Common Pleas and remanded the case to that court with instructions to enter a declaratory judgment voiding the STR regulations rendering them unenforceable.

Why This Matters – Summary

If you live in—or lead—a community with deed restrictions, this ruling reaffirms that homeowners associations cannot simply borrow zoning principles to limit short-term rentals (or other uses) unless the original deed restrictions explicitly say so. For property owners, it means you may have legal recourse if your association attempts to enforce rules beyond what’s clearly stated in your community’s declarations and covenants. And if you serve on a board or represent an association, you may need to revisit and clarify existing governing documents to ensure they align with long-established Pennsylvania law.

 In its application for appeal The Hideout argued that the zoning case The Slice of Life LLC, et al. v. Hamilton Township Zoning Hearing Board, et al., 207 A.2d 886 (Pa. 2019) governs a homeowners association’s authority to regulate STRs.  The Hideout’s argument sought to set aside century-old Pennsylvania jurisprudence separating the distinct law of private deed restrictions and zoning.

The Supreme Court’s denial of The Hideout’s application for appeal solidifies this separation and potentially calls into question the propriety of other deed restriction cases that apply the zoning policies espoused in the The Slice of Life LLC.  The Commonwealth Court’s decision did not even reference The Slice of Life LLC and the denial of appeal by the Supreme Court should give pause to counsel and courts alike if relying on The Slice of Life LLC when determining private deed restrictions, declarations and covenants.

In interpreting The Hideout’s declaration of covenants, the Commonwealth Court first held that the “single-family dwelling” restriction found within the declaration constituted a building restriction and not a use restriction, in that the restriction applied only to the type of building constructed, not the use of that building.  In The Hideout Appeal the Court cited longstanding Pennsylvania Supreme Court precedent regarding deed restrictive covenants, and compared building restrictions and use restrictions.  Building restrictions being “concerned with the physical aspect or external appearance of the building[.]”  Jones v. Park Lane for Convalescents, 120 A.2d 535, 538 (Pa. 1956).  Use restrictions on the other hand involve “the purpose for which the buildings are used, the nature of their occupancy, and the operations conducted therein[.]”  Jones at 538.  The Commonwealth Court recognized that “a building restriction and a use restriction are wholly independent of one another” and that one does not include the other “unless the intention to do so is expressly and plainly stated[.]”  Schulman v. Serrill, 246 A.2d 643, 646 (Pa. 1968) (quoting Jones).

As a result of the Supreme Court’s denial of The Hideout’s application for appeal, Pennsylvania Supreme Court precedent holding that the principles of zoning have no bearing on real property deed restrictions remains intact.  For over 110 years the law has been that one is the province of municipal policy and public sentiment expressed through local government under the requirements of the Municipalities Planning Code, and the other is purely one of private contract.  The Supreme Court has recognized that “. . . a gulf of difference separates a zoning regulation from a covenant restriction.” Haskell v. Gunson, 391 Pa. 120, 123, 137 A.2d 223, 225 (1958).  For now, this gulf between these two areas of real estate law remains uncrossed. 

The case now returns to the Wayne County Court of Common Pleas.

Should you have any questions about The Hideout Appeal or feel that your community association is wrongfully regulating Short Term Rentals, or otherwise violating its declarations or covenants through overreaching bylaws or rules and regulations, feel free to contact Eric B. Smith, Esquire at 215-540-2653 or esmith@timoneyknox.com.   You may also view Eric’s prior article Putting Short Term Rental Regulations In Focus. 

Mr. Smith, a partner of Timoney Knox, LLP, serves as Chair of the Firm’s Litigation Group and has been consistently recognized by Super Lawyers and Best Attorneys since 2005.  In 2017 Mr. Smith served as the President of the Montgomery Bar Association.  His commercial and real estate litigation practice spans across the Commonwealth of Pennsylvania. 

About The Author(s):

Eric B. Smith

Mr. Smith, a partner of Timoney Knox, LLP, serves as Chair of the Firm’s Litigation Group and has been consistently recognized by Super Lawyers and Best Attorneys since 2005.  In 2017 Mr. Smith served as the President of the Montgomery Bar Association.  His commercial and real estate litigation practice spans across the Commonwealth of Pennsylvania.

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