In a decision filed several weeks ago, the North Carolina Court of Appeals held that municipalities are strictly limited to the standards set forth in their ordinances in issuing zoning compliance permits and site plan approval. In Knight v. Town of Knightdale, No. COA 03-355, the Knights wished to construct a modular home. The Town staff had initially determined that the Knights’ home was "manufactured" and so, pursuant to the Town’s Unified Development Ordinance ("UDO"), a zoning compliance permit was issued by the staff. However, after the issue was raised by neighboring property owners, it was determined that the Knights’ home was actually "modular" rather than "manufactured" and according to the UDO would require a zoning compliance permit with Council site plan approval. The pertinent portions of the Town’s Unified Development Ordinance state:

The Town Council shall approve, approve with conditions, or deny, or take any other action consistent with its usual rules of procedure on the site plan. Actions shall be based on conformity with this chapter, the Comprehensive Plan, and other adopted plans and standards; however, no site plan shall be approved unless the Town Council first finds that the plan meets all the following: . . . The plan contains adequate measures to protect other properties, including public corridors, from adverse effects expected from the development, including without limitation, stormwater, noise, odor, on and off-street parking, dust, light, smoke and vibration.

The Town Council considered the request, took public comment, and referred the matter to the Town’s Planning and Appearance Board. The Planning and Appearance Board voted to recommend the Council approve the Knights’ site plan subject to certain changes such as adding a porch, constructing a driveway and sidewalk, and redesigning the chimney to more closely resemble a traditional chimney. Upon reconsideration, the Council took further public comment and then denied the permit application. Although the Council made no written findings, the minutes of the meeting indicate that the Council based the denial on the likelihood of diminution in the property values of surrounding property.

On appeal, the Court of Appeals noted that the North Carolina Supreme Court has directed that "[since] zoning ordinances are in derogation of common-law property rights, limitations and restrictions not clearly within the scope of the language employed in such ordinances should be excluded from the operation thereof." (quoting Capricorn Equity Corp. v. Town of Chapel Hill Bd. of Adjust., 334 N.C. 132 (1993)) It then considered the plain language of the Town’s UDO and concluded that diminution in neighboring property values was excluded from the scope and intent of the relevant standard set forth in the UDO and that the Town had erroneously denied the Knights’ application. Because the decision was based on an inappropriate consideration, not denoted in the UDO, the Court reversed the Council’s denial and ordered the Town to issue the permit.

If you have any questions regarding this alert or other Land Use and Zoning issues, please contact Kacey Ragsdale at 919.783.2957 or kragsdale@poynerspruill.com or Robin Tatum at 919.783.2931 or rtatum@poynerspruill.com.