BLOGS: North Carolina Land Use Litigator

Monday, November 24, 2014, 3:22 PM

Asheville, North Carolina Looks At Short-Term Rentals and Zoning, Fees

Thanks to the internet, is this a golden age of direct-to-consumer, everyday necessities like living quarters -- think AirBnB or Couchsurfing -- to transportation -- think Uber and Lyft?  Is laundry next?  What about eating?  And is this the next generation of internet-brokered person-to-person deals, beyond the eBays and Craigslists?

In Asheville, a tourist destination among the unrivaled western North Carolina mountains, the present issue is the short-term residential rental, even rising to the level of national news.  It's reported that the City had been looking at least since 2013 at zoning and fees and other regulatory approaches to short-term rentals, of which AirBnB is a purveyor.   Short-term rentals for less than 30 days time, in a structure separate from the primary residence (say, a detached garage or an apartment), is illegal in most parts of Asheville, we understand; renting a room in one's home for less than 30 days is legal under certain conditions.  

It's reported that a draft study from a City-retained consultant, released today, recommends that the City "limit" the number of short-term rentals in the City and charge fees of the owners.

We'll pass on the study when we can locate a copy.

"We'll need to share the bathroom and tell people we're dating.  
You know, to comply with the zoning laws.  Enjoy your stay."

Mike Thelen practices in Womble, Carlyle's Real Estate Litigation and Land Use practice group. He regularly represents a wide variety of clients, from local governments to businesses, in land use and land development matters in both state and federal venues throughout North Carolina.

Follow the North Carolina Land Use Litigator on Twitter at @nclanduselaw and "like" us on Facebook here.    

Wednesday, November 19, 2014, 11:37 AM

N.C. Appellate Court Speaks On Attorney Fee Recovery Law Applicable to Local Governments

In 2011, the North Carolina General Assembly enacted the following statute allowing payment of attorney fees in the face of certain local government acts:
In any action in which a city or county is a party, upon a finding by the court that the city or county acted outside the scope of its legal authority, the court may award reasonable attorneys' fees and costs to the party who successfully challenged the city's or county's action, provided that if the court also finds that the city's or county's action was an abuse of its discretion, the court shall award attorneys' fees and costs.
NCGS 6-21.7.  The statute is relatively new, and has not received much attention at all from the courts.

Yesterday, however, the North Carolina Court of Appeals upheld an award of attorney fees against Orange County, North Carolina.  The case is Phillips v. Orange County Health Department, No. COA13-1463 (November 18, 2014).

While not the central holding of the case -- the central holding is that the County was preempted by State law from regulating plaintiff's wastewater discharge system -- the attorney fee holding is the most interesting aspect to me.

The trial court awarded fees pursuant to NCGS 1-263, the State's Declaratory Judgment Act.  The trial court does not appear to have relied on NCGS 6-21.7 in rendering its award.

The appellate court, however, recites the language of NCGS 1-263 -- "the court may make such award of costs as may seem equitable and just" -- but it also recites the language of NCGS 6-21.7 in affirming the award.  What's more, the issue is whether the County's regulations and actions pursuant to its regulations were preempted by State law.  Thus, is the award pursuant to NCGS 1-263, or is it pursuant to NCGS 6-21.7?  Is the appellate court's invocation of NCGS 6-21.7 dicta?  If the Phillips Court's invocation of NCGS 6-21.7 is not dicta, is a local government preemption case to be viewed as one in which the local government "acted outside the scope of its legal authority" or "abused its discretion" such that attorney fees might be recoverable?

We think the courts will continue to explore the boundaries of this attorney fee provision.

Mike Thelen practices in Womble, Carlyle's Real Estate Litigation and Land Use practice group. He regularly represents a wide variety of clients, from local governments to businesses, in land use and land development matters in both state and federal venues throughout North Carolina.

Follow the North Carolina Land Use Litigator on Twitter at @nclanduselaw and "like" us on Facebook here.

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Tuesday, November 18, 2014, 3:05 PM

N.C. Court of Appeals Construes Zoning Provision Excluding All "Unidentified" Uses

Today, the North Carolina Court of Appeals issued a decision giving legal operation to the common, catchall zoning ordinance provision stating that “[u]ses not specifically listed in the Table of Permitted Uses are prohibited.”  The case is Byrd v. Franklin County, No. COA13-1457 (November 18, 2014).

At its core, the issues are (1) whether a shooting range is permitted on petitioners' property because it is not an identified use in the County's zoning ordinance, or (2) whether a shooting range is permitted as a "special use" pursuant to a quasi-judicial special use permit as a "Grounds and Facilities for Open Air Games and Sporting Events", or (3) whether the shooting range is prohibited on petitioners' property because it is not listed as a regulated use in the County's zoning ordinance and the zoning ordinance contains a provision that any "“[u]ses not specifically listed in the Table [] are prohibited.”

Ultimately, the Court agrees with the petitioner that the shooting range use is not a "Grounds and Facilities for Open Air Games and Sporting Events", and, thus, petitioner does not need a special use permit to operate.  But, critically, the Court also disagrees with petitioner that an unidentified use is not regulated by the County's zoning ordinance because of the "catchall" provision.  The Court's conclusion:
We believe that the UDO is unambiguous in prohibiting shooting ranges in the County. UDO section 6-1 states that “[u]ses not specifically listed in the Table of Permitted Uses are prohibited.” Based on a “fair and reasonable construction” of this language, the County clearly recognized that it could not list every conceivable way that property could be used, and, therefore, it sought to provide that any use not listed would be prohibited unless and until any said use not listed was added to the UDO through an amendment thereto approved by the Board of Commissioners. Otherwise, landowners would be allowed to operate a shooting range or any other use not specifically listed in the Table anywhere in the County.
The Court of Appeals distinguishes a recent case -- Land v. Village of Wesley Chapel -- which also involved a shooting range and which allowed the shooting range as a permitted use.  The Byrd Court believes the difference between the zoning ordinance in Franklin County and the zoning ordinance in the Village of Wesley Chapel is significant and distinguishing, in that the Wesley Chapel zoning law contains these provisions:  “those uses that are listed shall be interpreted liberally to include other uses that have similar impacts to the listed use,” and that “uses that are not listed [] and that do not have impacts that are similar to those of the listed uses are prohibited”.

On this note, we're reminded by John Cooke -- another editor of this blog -- of Judge Tyson's analysis in Robins v. Town of Hillsborough, 176 N.C. App. 1 (2006) , rev'd on other grounds, 361 N.C. 193 (2007): "Courts in other jurisdictions require a municipality to demonstrate a much greater substantial relationship between the ordinance and the public welfare where a total prohibition of a lawful activity is involved rather than an ordinance which merely confines a use to a particular district."

In Byrd's wake, are we left with the understanding that despite the admonition of Yancey v. Heafner, 268 N.C. 263 (1966) -- from which Byrd quotes -- that "[z]oning regulations are in derogation of common law rights and they cannot be construed to include or exclude by implication that which is not clearly [within] their express terms", a use not identified in a zoning ordinance may be prohibited entirely from locating in a jurisdiction if the ordinance contains a provision that “[u]ses not specifically listed in the Table of Permitted Uses are prohibited”?

We'll see, as Judge Hunter's dissent affords an opportunity for the Supreme Court to review the issue.

"Ah, but "pigs" are not the same as "pigs in party hats", when it comes to zoning parlours."

Mike Thelen practices in Womble, Carlyle's Real Estate Litigation and Land Use practice group. He regularly represents a wide variety of clients, from local governments to businesses, in land use and land development matters in both state and federal venues throughout North Carolina.

Follow the North Carolina Land Use Litigator on Twitter at @nclanduselaw and "like" us on Facebook here.

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Wednesday, November 12, 2014, 10:44 AM

Commercial Landlord Citing Lease Terms to Prevent Stores from Closing on Thanksgiving Day

It's rare that an ordinary commercial lease term can make national news, at least indirectly.

Some higher-profile stores are bucking the Holiday trend this year and refusing to open on Thanksgiving day.  Costco, Lowe's Home Improvement Centers, Nordstrom, DSW and Marshall's -- notably, representing an array of retailer species from big box to home improvement to specialty to clothing -- have each announced publicly that it will not open on Thanksgiving day.

This is a noble position, to some.

However, many commercial retail leases contain clauses requiring that the tenant remain open and continuously operate during business hours, with only certain exceptions.  These clauses serve at least one important purpose to the landlord and to the other tenants in the shopping center: if stores are mostly closed, or closed in large part, shopping mall traffic will of course reduce.  The less traffic, the fewer customers to spend, which is catastrophic for all stakeholders in a shopping center.  Makes sense, right?

These clauses are otherwise uninteresting, nationally.  But what happens if a store wants to close its doors on a given day to commemorate an event, a Holiday, or honor a notion?

As to the continuous operation clauses in leases, if Thanksgiving day is not an exception, or if the hours of operation are specified on that major shopping day, the tenant who chooses to close on Thanksgiving day could face repercussions at the hand of a landlord.

Just such a thing is happening in New York, apparently.  It seems an upstate mall is threatening to fine any of it retail tenants, presumably pursuant to a lease term, that do not open on Thanksgiving day.  The mall is taking its lumps, but we'd wager that it has the contractual right --  in the lease -- to do what it is doing, generally.

"Bah-reach of the lease Humbug."

Mike Thelen practices in Womble, Carlyle's Real Estate Litigation and Land Use practice group. He regularly represents a wide variety of clients, from local governments to businesses, in land use and land development matters in both state and federal venues throughout North Carolina.

Follow the North Carolina Land Use Litigator on Twitter at @nclanduselaw and "like" us on Facebook here.

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Tuesday, November 11, 2014, 3:58 PM

Womble Carlyle Land Use Video Series: The Interpretation of Zoning Laws

The latest installment of the Womble Carlyle Land Use Video Series is available here.

In this episode, John and Mike discuss the seemingly simple but decidedly important world of the the interpretation of zoning laws.  Want to build your project?  Better get that proper interpretation. Didn't get the interpretation you like?  Better appeal it.  Not sure if you have an actual interpretation?  Better be certain, lest timeframes will run or decisions will change.

Some of the questions we'll "hit on" in this episode include:

--Why is interpretation of zoning laws important to landowners, business owners and developers
--Who is responsible for interpreting zoning laws?
--What is the difference between a casual and formal interpretation of a zoning law?
--Why seek a formal interpretation?
--Should you involve a lawyer when seeking a formal interpretation of a zoning law?
--What rule would you select as the most important rule of the interpretation of zoning laws?
--Why is this rule so important?
--Do you have other means to change the interpretation of a zoning law?


Mike Thelen practices in Womble, Carlyle's Real Estate Litigation and Land Use practice group. He regularly represents a wide variety of clients, from local governments to businesses, in land use and land development matters in both state and federal venues throughout North Carolina.

Follow the North Carolina Land Use Litigator on Twitter at @nclanduselaw and "like" us on Facebook here.
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