What are North Carolina Vested Land Rights?

North Carolina has long recognized the legal concept of vested land rights. The rights are vested -- possessed -- by landowners and give them the right to freely use their property. At the same time, North Carolina has long recognized that counties, towns, cities and municipalities have the power and authority to regulate land use. Zoning laws are a good example. Zoning laws are used by local governments to direct and manage growth through regulating the size of land lots, building heights, population densities, differentiating commercial districts from and residential districts, etc.

Vested land rights come into play when a new land use law is passed. Essentially, any land use or structures built can continue even if the use or structure does not conform to the new land use law. For example, assume a landowner on the shore of a lake is operating a commercial boat repair business on about half of the land. Now assume that the county or municipality enacts a new zoning ordinance that zones all the land adjoining the lake for exclusive residential use. Under the zoning ordinance, no commercial businesses are allowed on those parcels of land. However, because of vested land rights and because the boat repair business predates the new zoning law, the business owner can continue to operate the boat repair business.

North Carolina law DOES allow for some regulations when a new land use law is enacted. For example, a new zoning law can specify that any existing non-conforming uses cannot expand, enlarge, change or be extended. Thus, in our example, the new zoning law could state that an existing repair business could not change or expand. Thus, the hypothetical boat repair business could not become a restaurant or expand its size to the entirety of the property.

Vested land rights also come into play when a use or building permit is issued. While the permit is pending, if a new land use law is passed, under certain conditions, the permit is still valid even if the permit would violate the new land use law. Generally, the conditions are these:

• If substantial expenditures have been made after the permit was issued and before the new law was enacted
• The expenditures were made in good faith
• The expenditures were made in reliance on valid government approval, if approval was required and
• The landowner would be harmed without vested rights

Let's look at a different example. Assume a landowner has some rural and wooded acreage and decides to develop a campground and a hunting/sporting business. Let's further assume that, prior to starting, either no local governmental approval was needed or that a permit was obtained. Also, assume that, shortly after buying the land, the owner begins to build roads, clear campsites, purchase materials for cabins and other structures and begins the process of developing the property. Now, assume that a few months later, the county passes a land use law that prohibits the building of campgrounds.

In our example, because of vested land rights and because the landowner meets the four-part test listed above, the campground can be completed. In our example, the landowner has made "substantial expenditures" in "good faith" and would be harmed if development of the campground was halted.

Vested land rights exist under both North Carolina common law and under statutes. In simple terms, the common law is "judge-made" law in cases decided over the years. There is a long list of North Carolina cases where judges have determined that vested land rights exist.

Vested land rights are also statutory. The statutory vested rights are in addition to whatever rights might exist because of the common law. For example, N.C. Gen. Stat. § 160D-108, provides for vesting of land rights when permits are issued. In the preface to the statute, the North Carolina General Assembly stated that

"... it is necessary and desirable to provide for the establishment of certain vested rights in order to ensure reasonable certainty, stability, and fairness in the development regulation process, to secure the reasonable expectations of landowners, and to foster cooperation between the public and private sectors in land-use planning and development regulation."

The statute explicitly provided for vest rights where changes to land use laws and regulations are not applicable or enforceable without the written consent of the owner with respect to:

• Buildings or uses of buildings or land for which a development permit has been issued
• Subdivisions of land for which a development permit has been issued
• A site-specific vesting plan has been approved
• A multi-phased development pursuant has been approved
• A development agreement has been agreed to and authorized

Further, the statute states that "[a] vested right, once established as provided for in this section or by common law, precludes any action by a local government that would change, alter, impair, prevent, diminish, or otherwise delay the development or use of the property allowed by the applicable land development regulation or regulations..."

For more information, and to schedule a confidential consultation with experienced and dedicated zoning and land use attorneys in Charlotte, contact Arnold & Smith, PLLC. Use our “Contact” page or give us a call at 704-370-2828. We handle land use, zoning and condemnation legal matters in Mecklenburg County and elsewhere in North Carolina. We have offices in Charlotte, Lake Norman, and Union County.