Supreme Court to Consider Constitutionality of Planned Community Act
The North Carolina Supreme Court has recently retained the case of Riverpointe Homeowners Association v. Mallory to consider certain constitutional issues raised with the Planned Community Act. Specifically, the Supreme Court will consider arguments from the homeowner in this case that the powers granted to communities in Act, including fining, are unconstitutional as applied to communities formed prior to the effective date of the Act.
The case involves a dispute in which a homeowners association fined a homeowner for violations of certain covenants applicable to the community. The association levied fines against the homeowner, filed a lien to collect the fines and pursued foreclosure of the lien which secured the fines through the Clerk of Court. The Clerk denied the request to foreclose the lien and the Superior Court affirmed. The Court of Appeals issued its decision in February of 2008 reversing the trial court’s refusal to foreclose the lien and the homeowner appealed to the North Carolina Supreme Court based on substantial constitutional grounds.
The Supreme Court issued an order on 27 August 2008 in which it retained review of the constitutional issues raised in the homeowners appeal. The issue of retroactive application of the Act has already been decided favorably for homeowners associations by the North Carolina Court of Appeals in the 2007 case of Reidy v. Whitehart.