This lawsuit was filed in 2018 by C Investments 2 LLC, a real estate developer in Charlotte North Carolina. The Plaintiff sued all the lot owners in a neighborhood called Country Colony in Mecklenburg County, North Carolina. Country Colony was established in 1952, and consisted at that time of 17 residential lots. A copy of the plat map for Country Colony is attached to this Executive Summary as Exhibit A. The developers of Country Colony, Henry Newson and Miriam Newson, recorded Protective Covenants for Country Colony, and all lots were sold subject to the Protective Covenants. A copy of the Protective Covenants is attached to this Executive Summary as Exhibit B. Country Colony continues to be a single-family residential neighborhood developed in accordance with scheme of development set forth by the Newsons in the Protective Covenants. However, Plaintiff acquired several of the lots in Country Colony and seeks to subdivide them and to construct substantial multifamily projects on the lots it owns.
The main issue advanced by the Plaintiff, and the primary issue on appeal, is whether or not the North Carolina Marketable Title Act, N.C.G.S. § 478-1, et seq., has extinguished a// the Protective Covenants other than the residential use restriction . Specifically, the Plaintiff successfully argued to the trial court and the Court of Appeals that the Marketable Title Act extinguished all of the restrictions other than the residential use restriction, because none of the exceptions in the Act applied. We, representing a group of the Defendants, argued that the exception contained in N.C.G.S. § 478-3(13) protected all the scheme of development restrictions set forth in the Protective Covenants filed by the Newsons. There is one (1) issue on appeal:
1) Does the exception to the real property Marketable Title Act contained in N.C.G.S.§ 478-3(13), protect all of the restrictive covenants imposed for Country Colony under the Newsons' common scheme of development, or does it merely protect the residential use only restriction.
The Court's ruling, if upheld will adversely affect every neighborhood association in the State of North Carolina. The Court of Appeals decision would effectively allow developers to avoid the protective covenants for most planned communities in North Carolina, except for the residential use restriction. The elimination of single-family restrictions, setback restrictions, height restrictions, and the numerous other standard restrictions which form the scheme of development for most neighborhoods in North Carolina are at risk if this opinion is upheld by the Supreme Court. This will be a landmark decision affecting the practice a real estate in the State of North Carolina from Murphy to Manteo. It is extremely important that the decision be reversed, and the exception to the Marketable Title Act be interpreted to include all the restrictive covenants set forth in the scheme of development of each neighborhood. We believe strongly this was intent of the drafters of the legislation. This has been confirmed by conversations with the leading proponent of the legislation. The trial courts in North Carolina have differed on this issue, so it is ripe for determination to settle the law in the State of North Carolina.
Amicus Brief
Supreme Court of North Carolina Opinion – December 2022
Court: North Carolina Supreme Court
Topic: North Carolina Marketable Title Act
Brief Author: H. Weldon Jones, III, of Jordan Price in Raleigh, North Carolina
Filed: April 12, 2022
CAI Amicus Review Panel: Mr. Robert Diamond, Esq., Mr. Stephen Marcus, Esq., Ms. Hope Carmichael, Esq (NC), Mr. Clint Goodman, Esq. (AZ), Ms. Terry A. Kessler Esq. (NJ), Ms. Melissa Ward, Esq. (CA), and Mr. Scott Weiss, Esq. (TN)