A South Haven listing with years of summer bookings looks like it comes with a working rental. Under the city's current ordinance, the license that made those bookings legal is personal to the seller. It ends with their ownership. The buyer gets something narrower and less obvious. In most of the city, that is a zoning status with a fixed size and an expiration clock, and it is the buyer's job to prove it exists.
That status, more than the booking calendar, decides what you can do with the house. It also decides what you can do to it.
What the closing actually hands over
The City of South Haven rebuilt its short-term rental rules in 2025. Ordinance 1097 was adopted March 17, 2025, and took effect March 27, 2025. It created Article V, Chapter 14, and phased out the older Article X registration system. Every Article X registration expired by May 1, 2026, so every legal rental in the city now runs under the new framework.
The ordinance treats a rental of 28 days or less as a commercial use. It says a license is unique to the licensee and the dwelling, cannot be transferred, can be revoked, and is not a property right. The city's licensing FAQ answers the seller's question directly:
"STR licenses are not transferable, but the right to rent stays with the property. New owners will need to apply for zoning compliance determination, a license, pay the applicable fees, and submit to inspection prior to renting."
Most of the meaning sits in the phrase "the right to rent." For a house that has never been rented, the only way in is the city's STR overlay district. There, a new rental needs special land use approval from the Planning Commission before it can apply for a license. That application costs $500 plus a $1,500 escrow, and the commission can attach conditions. A rental that existed before the new rules and sits outside that path keeps going as a lawfully nonconforming use under Article 23 of the South Haven Zoning Ordinance. The rest of this post deals with what that status allows.
The status you inherit has a ceiling
Section 2303 of the zoning ordinance lets a nonconforming use continue "so long as it remains otherwise lawful." It may not be "enlarged, extended, intensified, or expanded" in a way that increases its nonconforming nature. The ordinance's own examples include "additional dwelling units, additional bedrooms."
For a second-home buyer, this rule matters more than any other. A common plan for a dated cottage is to finish the lower level, add a bedroom or two, and rent to bigger groups. On a nonconforming rental, that renovation runs straight into the expansion bar. Open, unenclosed decks and patios are carved out if they meet dimensional and railing standards, but the ordinance adds that such an expansion "shall not later be enclosed."
Occupancy follows the same logic. Under the new rules, the cap is two occupants per bedroom plus two per finished story, reduced to the number of compliant sleeping areas, with a ceiling of 12. A unit registered under the old ordinance with a higher maximum can keep it. The city counts anyone over 24 months old as an occupant. Parking follows the same pattern. A lawfully nonconforming rental keeps the parking requirement it had when first registered, and the city checks that during zoning review. Two cottages with the same square footage can carry very different rental capacity because of history, not floor plan.
The type of license is also inherited from zoning. Section 14-504 of Ordinance 1097 makes license class depend on what the zoning ordinance allows at that address:
| Class I | Class II | |
|---|---|---|
| Eligibility | Zoning allows renting more than 28 days a year | Zoning limits renting to 28 days a year or less |
| Rental limits | Unlimited terms, no more than 2 terms in any 7-day period, 2-night minimum | 28 days or 6 terms a year, whichever comes first |
| Application and inspection | $450 | $250 |
| Two-year license | $750 | $250 |
A seller who rented eight weeks a summer under the old "Business" certificate and a seller who rented a few long weekends under the old "Personal" certificate were running different products. The city says Class I and Class II roughly track those old categories. If you're underwriting a purchase on rental income, the difference between six terms a year and an open calendar is the whole number.
The status can lapse, and you have to prove it
The ceiling limits what the status can become. Two more provisions decide whether you still have it.
Under Section 2303, a nonconforming use "shall not be reestablished if it is abandoned for more than 1 year." The ordinance lists evidence of intent to abandon: disconnected utilities, a property that appears vacant, removal of fixtures or equipment needed for the use, and simply "operations or activities on the property have ceased." A sale on its own doesn't end anything. Section 2301 says a change of ownership "shall not affect its nonconforming status." A long listing period, or a seller who stopped taking bookings while the house was on the market, is a different situation. The zoning text doesn't say that a license lapse alone ends zoning status. Section 2303 does tie continuation to the use remaining "otherwise lawful," and the overlay provisions require rentals to meet the city's licensing rules.
Proof falls on the owner. Section 2301 says that in a dispute, the party claiming nonconformity must demonstrate "the existence of a lawful nonconformity (as well as the size, scope, intensity, and extent thereof)." A use that was established in violation of an earlier ordinance, or that broke the terms of its original permit, doesn't qualify at all. In practice, the seller's paperwork does most of the work: old registrations, inspection records, occupancy approvals, and evidence of continuous operation. The buyer is the one who will need it.
The calendar after closing
On paper, the new owner's path is short. The timing is what catches people. The city sets out this sequence:
- Zoning compliance determination. The initial review fee is $450. The city's page currently puts review time for completed applications at about four months. The fee was $900 until a November 17, 2025 resolution cut it in half and provided refunds for earlier payments.
- License application and inspection. The inspector checks the dwelling and the accessible property. A passing inspection is valid for 45 days, and a license lasts two years. Reinspection and no-show fees are $150 each.
- Operator designation. The operator has to be the owner or a licensed real estate broker, and has to respond to any notice from the city's complaint system within 45 minutes. The old rule that a local agent live or work within 45 miles is gone.
Run that against today's date. A buyer who closes in mid-October 2026 and files a complete zoning application the same week would, at the city's posted pace, get a determination around mid-February. That leaves inspection and licensing for late winter, before the summer booking window fills.
The backlog behind that four-month estimate has been real. WSJM reported in March 2026 that the city manager said staff had processed only about 20% of registered rentals. The council's answer was a conditional license for the 2026 season, starting March 27, 2026, for owners who had filed complete zoning and licensing applications with fees. The city's page describes that fix for the 2026 season and says nothing about 2027, so a buyer counting on next summer's income should get the current timeline from the city directly.
Outside city limits, a different instrument
The license-and-nonconformity structure belongs to the City of South Haven. The townships around it use annual registration.
South Haven Charter Township's Ordinance No. 168 replaced its predecessor in full. It requires annual registration before a single-family home is rented or advertised, defines rentals as 3 to 27 nights, and allows only one rental term to begin per Sunday-to-Saturday week. It also requires at least $1 million in insurance, an owner within 45 miles or a local agent who can be on site within an hour, and septic certification where public sewer isn't available. Casco Township charges a $375 annual registration due by April 1 and uses similar three-night and one-start-per-week rules. The text of South Haven Charter Township's Ordinance No. 168 contains no license cap, waitlist, or sale-transfer mechanism.
At the state level, HB 6026 and HB 6027 were introduced June 2, 2026. Together they would create a statewide registry, add a 6% excise tax, and bar local governments from banning short-term rentals outright. Both were pending in committee at last review and are not law.
Short answers
Can a buyer start a rental in a South Haven home that was never rented?
Only within the city's STR overlay district, and only after Planning Commission special land use approval. The city's website has an interactive overlay map with address lookup.
Does the house lose its rental status the day it sells?
No. The ordinance says a change of ownership doesn't affect nonconforming status. The license still has to be replaced, and a long stop in operations can be treated as evidence of abandonment.
Is there a cap on licenses in the city?
City materials describe no numeric cap or waitlist. Limits come from the overlay district and the special land use process.
This post is general information, not legal, tax, or financial advice. Ordinances change, so confirm how they apply to a specific property with the City of South Haven and a qualified attorney.
If you're weighing a South Haven home that has a rental history, Wortman Group can help you work out which records will matter before you write an offer and what the zoning lets the house become. Request a private consultation and valuation.