A Cautionary Tale of Amending Ordinances: Frazier v. Town of Blowing Rock
The recent criminal justice reform bill passed by the North Carolina General Assembly discussed here has caused local governments to review their ordinances to ensure they comply with the new law. In doing so, entities need to ensure the revisions don’t conflict with other portions of the ordinances. The recent opinion of Frazier v. Town of Blowing Rock explains how a challenger can use conflicting definitions to their advantage in another installment of local governments versus short term rentals.
The Town of Blowing Rock enacted an ordinance in 1984 which regulated “tourist homes and other temporary residences renting by the day or week” and included this language in the Table of Permissible Uses. The Town amended the ordinances in 2000 to define “short-term rentals” as “rental, lease, or use of an attached or detached residential dwelling unit that is less than 28 consecutive days” and established a short-term rental overlay district in multi-family residential districts. The 2000 ordinance amendment did not include the phrase “short-term rentals” in the Table of Permissible Uses, despite the 1984 language remaining in the Table of Permissible Uses. The phrase was eventually added to the Table of Permissible Uses in 2019 through another amendment, which replaced the original language of “tourist homes and other temporary residences renting by the day or week.”
Chad Frazier purchased investment properties in the Town in 2016 to be used for short-term rental purposes. He was issued a notice of violation in 2019 (after the final amendment to the ordinance) for violating the ordinance prohibiting short-term rentals in the zoning district where the properties were located. Mr. Frazier appealed the notice of violation to the Board of Adjustment, arguing the properties were a lawful, nonconforming use. The Board ruled the properties, as short-term rentals, were an illegal, non-conforming use. Mr. Frazier appealed to the Superior Court who reversed the Board’s decision, finding (1) the properties, as short-term rentals, were “a grandfathered and valid non-conforming use;” and (2) the 1984 ordinance’s language prohibiting “temporary residences renting by the day or week” was vague and ambiguous, and therefore unenforceable, until the 2019 amendment to the ordinance clarified the ambiguity.
The Town appealed and the Court of Appeals affirmed the Superior Court’s decision. The Court noted at the outset “[W]hen there is ambiguity in a zoning regulation, there is a special rule of construction requiring the ambiguous language to be ‘construed in favor of the free use of real property.’” Visible Properties, LLC v. Vill. of Clemmons, 2022- NCCOA-529, ¶ 11 (quoting Morris Commc’ns Corp. v. City of Bessemer, 365 N.C. 152, 157, 712 S.E.2d 868, 871 (2011)). With that in mind, the Court stated, prior to the 2019 amendment, “two comparable, yet apparently distinct land use definitions simultaneously exist[ed] in the Town’s Ordinances, but only one is clearly prohibited by the Town’s Table of Permissible Uses.” The Court concluded this discrepancy caused ambiguity because while the Town attempted to simultaneously prohibit two distinct land uses, only one use was lawfully prohibited by the Town’s Table of Permissible Uses.
Accordingly, the Court applied the Town’s nonconforming use provision in the ordinance which permitted nonconforming situations which were otherwise lawful on the effective date of the ordinance to continue. Since the regulations on short-term rentals were not enforceable until 20109, Mr. Frazier’s properties were determined to be lawful, nonconforming properties.
The 2000 amendment to the ordinance was done in good faith, but it created conflicts in the enforcement of short-term rentals. This conflict caused the enforcement date to be pushed from 2000 to 2019, thereby excluding almost two decades worth of real estate transactions from regulation.
When amending an ordinance, whether entirely or piecemealed, it is important to review the ordinances in their entirety to ensure there is no conflict between them.