USA – NORTH CAROLINA Law and Practice Contributed by: John Livingston and Brittani Miller, Kilpatrick Townsend & Stockton LLP
4. Planning and Zoning 4.1 Planning and Zoning Framework
typically ranging from six to 18 months or more due to litigation and procedural requirements. The exact timeline depends on factors such as the complexity of the case, borrower challenges, and compliance with statutory notice and procedural requirements. Properly recording the deed of trust with the Regis - ter of Deeds is essential, as priority follows the “first in time, first in right” rule, with earlier-recorded liens generally taking precedence. Lenders may also nego - tiate subordination agreements with pre-existing lien - holders or pay off prior liens, such as mortgages or mechanic’s liens, to secure first-priority status. 3.7 Subordinating Existing Debt to Newly Created Debt Subordination can occur through a subordination agreement, where the existing lienholder voluntarily agrees to subordinate their lien to the newly created debt. Subordination agreements must be in writ - ing and recorded in the land records in the county where the subject property is located to provide pub - lic notice. Additionally, under North Carolina law, lien priority is generally determined by the order of record - ing, following the “first in time, first in right” principle. 3.8 Lenders’ Liability Under Environmental Laws Lenders holding or enforcing security over real estate can face liability under federal and state environmental laws, particularly if they participate in the manage - ment of a facility. However, liability protections are available under CERCLA’s secured creditor exemption and through environmental due diligence. 3.9 Effects of a Borrower Becoming Insolvent A borrower’s insolvency does not automatically void security interests created in favour of a lender. How - ever, the enforceability and priority of such security interests may be affected under federal and state bankruptcy laws in limited circumstances. 3.10 Taxes on Loans Borrowers pay the recording fees to record the loan documents in the county where the property is locat - ed.
Land use, development, design and construction are primarily governed by N.C. Gen. Stat. §160D, which establishes the framework for zoning, subdivision and land use ordinances. Municipal and county councils, along with their planning departments, boards of adjustment and specialised commissions, are respon - sible for administering and enforcing these controls. Local authorities adopt and implement zoning ordi - nances, building codes and comprehensive plans to regulate site design and construction standards, while permitting, inspections and enforcement actions, including penalties for non-compliance, ensure adher - ence to these requirements. 4.2 Development Process, Challenges and Enforcement The acquisition of development rights is governed by local municipal or county authorities pursuant to ordi - nances adopted under N.C. Gen. Stat. §160D. Devel - opers must apply to the relevant planning department for approvals such as zoning changes, variances or special use permits; site plans and architectural designs are reviewed for compliance with zoning ordi - nances and building codes. Public hearings are typi - cally required for granting development rights where third parties, such as neighbouring property owners, may briefly voice objections or provide input. If an application is denied, appeal rights allow applicants to challenge decisions, with procedures (including time - lines and notice requirements) defined by local author - ities and statute; for example, Wake County requires written appeals within 30 days to the Planning Director and Land Development Administrator, followed by a hearing before the Board of Adjustment. Enforcement of planning and zoning restrictions occurs through permitting and inspection processes, and violations, such as unauthorised land use or exceeding density limits, may result in penalties or orders to halt con - struction, with recourse available through the courts if government action is alleged to be unlawful.
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