It only gets worse: Texas Appeals Court Bans Leasing
July 10, 2025 11:25
As I've been blogging for some time, decisions allowing HOA's and subdivisions to ban short-term leasing by amending covenants were harbingers of much worse to come.
Much worse has come. On May 29, 2025, the Corpus Christi Court of Appeals held in Swan Point Landing v. Martin that my clients, who invested in rental homes in a subdivision, had no vested right to lease based on the covenants in force at the time of purchase. In that case, the original developer, who still owned about 1/2 of the lots, along with about 20 other owners, voted to amend the covenants to completely ban leasing unless the HOA board granted permission — which it didn't. The trial court struck the amendment, but the court of appeals held that banning leasing furthers a developer's "residential scheme of development."
On June 12, 2026, the Texas Supreme Court declined to even hear the case.
It's a stunning result. DO NOT BUY INVESTMENT RENTAL PROPERTY IN TEXAS WITHOUT TALKING TO A LAWYER WHO HAS READ AND DIGESTED THE SWAN POINT V. MARTIN CASE.
Any notion that Texas is a property-rights state is a sad illusion. It is now a private-enclave state, where existing owners will impose onerous new restrictions which dash any of the rights the developer seemed to allow.
Much worse has come. On May 29, 2025, the Corpus Christi Court of Appeals held in Swan Point Landing v. Martin that my clients, who invested in rental homes in a subdivision, had no vested right to lease based on the covenants in force at the time of purchase. In that case, the original developer, who still owned about 1/2 of the lots, along with about 20 other owners, voted to amend the covenants to completely ban leasing unless the HOA board granted permission — which it didn't. The trial court struck the amendment, but the court of appeals held that banning leasing furthers a developer's "residential scheme of development."
On June 12, 2026, the Texas Supreme Court declined to even hear the case.
It's a stunning result. DO NOT BUY INVESTMENT RENTAL PROPERTY IN TEXAS WITHOUT TALKING TO A LAWYER WHO HAS READ AND DIGESTED THE SWAN POINT V. MARTIN CASE.
Any notion that Texas is a property-rights state is a sad illusion. It is now a private-enclave state, where existing owners will impose onerous new restrictions which dash any of the rights the developer seemed to allow.