Recent Case Law Does Not Doom All Rental Restriction Amendments

The North Carolina Court of Appeals recently released two cases that raise the question of whether a covenant amendment containing rental restrictions may be adopted by a condominium association or homeowners association.

Both cases – Mileview LLC, et al. v. The Reserve II at Sugar Mountain Condominium Owners Association (February 2024) and McDougald v. White Oak Plantation Homeowners Association, Inc. (August 2024) – are unpublished decisions, meaning they lack precedential value in future cases. Despite the fact these cases are not binding precedents, they are insightful. They show how the Court of Appeals views rental restriction amendments in certain contexts.

Both cases apply the Armstrong v. Ledges Homeowners Association, Inc. standard that amendments must be reasonable. Armstrong is a 2006 North Carolina Supreme Court case that established the lens by which future amendments must be considered by a court. The two recent Court of Appeals cases mentioned