The North Carolina Court of Appeals struck down Union County’s Adequate Public Facilities Ordinance (APFO) and its Voluntary Mitigation Payment (VMP) in a decision handed down on December 8, 2009. A panel of three appellate judges unanimously reversed a decision by the trial court upholding the ordinance and remanded the case back to Union County Superior Court for further proceedings consistent with the opinion. The court agreed with the plaintiffs’ argument that the North Carolina General Assembly “neither expressly nor impliedly authorized the defendant (county) to adopt the APFO.”

The case was brought by the Union County Land Owners Association, made up of Union County builders and NCHBA members, including Craft Development, R.D. Harrell Company, and Fairview Developers, against the APFO adopted by the Union County Commissioners in October of 2006. The ordinance provided that a residential development would be rejected if the county found that the plans would overburden the capacity of schools serving the development. However, if the landowner was willing to pay a VMP totaling almost $16,000 per house, the development could proceed.

The litigation was supported by the NCHBA Legal Action Fund and an amicus brief was filed in support of the plaintiffs by NCHBA, the NC Association of Realtors, and the Piedmont Public Policy Institute. The county’s position was supported by briefs filed by the NC School Boards Association, the NC Association of County Commissioners, and the International Municipal Lawyers Association.

“This is a major victory for landowners in North Carolina,” said Mike Carpenter, NCHBA Executive Vice President & General Counsel. “In 2006, the Court of Appeals struck down Durham County’s illegal school impact fee and several counties, including Union, adopted APFO’s in an effort to avoid the application of that decision. The impact of this decision cannot be overstated. It calls into question the legality of other similar ordinances adopted by other counties in the state.”

While the county may seek to have this decision reviewed by the Supreme Court of North Carolina, such review, if sought, is not automatic since the decision of the appeals court panel was unanimous.

Click here to review a copy of the court's decision.