Case Name: CHAPEL HILL TITLE AND ABSTRACT COMPANY, INC., and JONATHAN STARR and wife, LINDSAY STARR, Petitioners v. TOWN OF CHAPEL HILL and the TOWN OF CHAPEL HILL BOARD OF ADJUSTMENT, Respondents v. ROBERT B. FERRIER, HANSON R. MALPASS, and wife, BETSY J. MALPASS, Respondent-Intervenors
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 2008-12-12
Citations: 362 N.C. 649
Docket Number: No. 275A08
Parties: CHAPEL HILL TITLE AND ABSTRACT COMPANY, INC., and JONATHAN STARR and wife, LINDSAY STARR, Petitioners v. TOWN OF CHAPEL HILL and the TOWN OF CHAPEL HILL BOARD OF ADJUSTMENT, Respondents v. ROBERT B. FERRIER, HANSON R. MALPASS, and wife, BETSY J. MALPASS, Respondent-Intervenors
Judges: 
Reporter: North Carolina Reports
Volume: 362
Pages: 649–656

Head Matter:
CHAPEL HILL TITLE AND ABSTRACT COMPANY, INC., and JONATHAN STARR and wife, LINDSAY STARR, Petitioners v. TOWN OF CHAPEL HILL and the TOWN OF CHAPEL HILL BOARD OF ADJUSTMENT, Respondents v. ROBERT B. FERRIER, HANSON R. MALPASS, and wife, BETSY J. MALPASS, Respondent-Intervenors
Ño. 275A08
(Filed 12 December 2008)
Zoning— variance — conservation district plus restrictive covenants — no legally reasonable use
A board of adjustment erred by denying a request for a variance where a Resource Conservation District ordinance prohibited construction on 78.5% of the property and restrictive covenants prevented construction on the remainder. The language of the ordinance requires a variance if the owner is left with no legally reasonable use, and instructs the board of adjustment to consider the actual state in which the property is found when determining that question. A prior building permit that can never be used does not rebut the presumption of no legally reasonable use.
Justice BRADY concurring.
Appeal pursuant to N.C.G.S. § 7A-30(2) from the decision of a divided panel of the Court of Appeals, 190 N.C. App.-, 660 S.E.2d 667 (2008), reversing and remanding an order entered on 25 July 2007 by Judge Kenneth C. Titus in Superior Court, Orange County. Heard in the Supreme Court 14 October 2008.
The Brough Law Firm, by Michael B. Brough, for petitioner-appellants.
Northen Blue, LLP, by David M. Rooks and Samantha H. Cabe, for respondent-appellees.
Poyner & Spruill LLP, by Robin Tatum Currin and Andrew J. Petesch, for respondent-intervenor-appellees.

Opinion:
HUDSON, Justice.
In 2004 petitioners Chapel Hill Title and Abstract Company and Jonathan and Lindsay Starr sought a variance from respondents Town of Chapel Hill and its Board of Adjustment to construct a home in Chapel Hill on a vacant lot zoned for residential use. Because 78.5% of the property in question falls within a "Resource Conservation District" (RCD), unless petitioners receive a variance, the lot is subject to an ordinance that generally prohibits construction in such RCD areas. Moreover, restrictive covenants that also apply to the lot likewise prevented petitioners from building on the portion of the lot not subject to the RCD ordinance. After a protracted legal battle among the parties, including a first appeal to and remand by the Court of Appeals, the Board of Adjustment denied the variance on 30 January 2007.
The Superior Court of Orange County granted petitioners' writ of certiorari to review the Board's decision and allowed respondentintervenors, who own homes in the immediate vicinity of the subject property, to intervene in the action. On 25 July 2007, the trial court entered an order reversing the Board's decision and remanding the matter with instructions "to issue the requested variance." Respondents and respondent-intervenors appealed to the Court of Appeals, which reversed the trial court in a 20 May 2008 divided opinion and remanded with instructions to reinstate the Board's resolution denying the variance. Chapel Hill Title & Abstract Co., Inc. v. Town of Chapel Hill, 190 N.C. App. -, -, 660 S.E.2d 667, 673 (2008). Based on the dissent in the Court of Appeals, petitioners appealed to this Court.
Petitioners challenge two conclusions of law made in the Board's denial of their request for a variance and subsequently upheld by the Court of Appeals: (1) Because petitioner Chapel Hill Title obtained a building permit in December 2002 to construct a residence on the lot in a location wholly outside the RCD, the operation of the RCD ordinance is not responsible for petitioners having no legally reasonable use of the property; and (2) because petitioners were aware of the RCD ordinance and other limitations when they purchased the property, any hardship is self-created and does not arise out of application of the ordinance. The Town of Chapel Hill conceded in oral arguments before this Court that if petitioners could not build at all without the variance, denial of the variance would result in "extreme hardship" to petitioners. As such, we need not consider the arguments offered as to the rule applicable to a self-created hardship. Instead, we address only the issue of whether petitioners are left with "no legally reasonable use" of their property.
At the outset, we look to the pertinent language of the RCD ordinance itself to determine when a variance must be granted:
3.6.3 Resource Conservation District
(j) Variances in the Resource Conservation District
(1) Application
An owner of property who alleges that the provisions of the Resource Conservation District leave no legally reasonable use of the property may apply to the Board of Adjustment for a variance. . . .
(2) Required Findings
A. The review of the Board of Adjustment shall extend to the entire zoning lot that includes area within the Resource Conservation District. The Board of Adjustment shall grant a variance, subject to the protections of this Article, if it finds:
(1.) That the provisions of this Article leave an owner no legally reasonable use of the portion of the zoning lot outside of the regulatory floodplain; and
(2.) That a failure to grant the variance would result in extreme hardship.
B. In making such findings, the Board of Adjustment shall consider the uses available to the owner of the entire zoning lot that includes area within the Resource Conservation District.
(7) Presumption
. [A] showing that the portion of the Resource Conservation District outside of a regulatory floodplain overlays more than seventy-five percent (75%) of the area of a zoning lot, shall establish a rebuttable presumption that the Resource Conservation District leaves the owner no legally reasonable use of the zoning lot outside of the regulatory floodplain. Such presumption may be rebutted by substantial evidence before the Board of Adjustment. '
Chapel Hill, N.C., Land Use Management Ordinance art. 3.6.3 (2004) (titled "Resource Conservation District").
According to the Board and the Court of Appeals majority below, although petitioners were entitled to the rebuttable presumption of "no legally reasonable use" because 78.5% of the property in question falls within an RCD, that presumption was rebutted by the building permit granted to petitioner Chapel Hill Title in 2002. Thus, "the provisions of this Article," namely, the operation of the RCD ordinance alone, did not leave petitioners with "no legally reasonable use" of the property. Id. (emphasis added). Nevertheless, due to restrictive covenants to which the property is also subject, petitioner Chapel Hill Title was enjoined in April 2003 from using that building permit to construct a residence outside the RCD area of the lot in question.
The central question we address is whether the Board should consider the operation of the RCD ordinance independently, or in conjunction with, the effect of the private restrictive covenants, when determining if petitioners are entitled to a variance. We find the plain language of the ordinance itself to provide the answer, to wit: "In making such findings [as to legally reasonable use and extreme hardship], the Board of Adjustment shall consider the uses available to the owner of the entire zoning lot that includes area within the Resource Conservation District." Id. (emphasis added). Thus, the variance language of the ordinance instructs the Board to consider the actual state in which the property is found — including both its physical and legal conditions — and how those conditions interact with the RCD ordinance, when determining if a variance is necessary to leave an owner with a "legally reasonable use" of the property.
Here, petitioners are clearly prevented by restrictive covenants from constructing a home on the 21.5% of the property that falls outside of the RCD ordinance; as such, they have no reasonable "uses available" to them of that portion of the lot. Likewise, because more than seventy-five percent of the property is subject to the ordinance, petitioners have shown they are entitled to rely on the rebuttable presumption of "no legally reasonable use" of the property. This presumption is not rebutted by a building permit that was issued but can never be used.
We find that the Board of Adjustment failed to properly consider "the uses available" to petitioners of the entire lot when determining that the 2002 building permit issued to petitioner Chapel Hill Title rebutted the presumption that petitioners were left with "no legally reasonable use" under the operation of the RCD variance. We therefore conclude that the Board erred by denying petitioners' request for a variance. Accordingly, we reverse the Court of Appeals and remand to that court with instructions to remand to the trial court to reinstate its original order to remand to the Board of Adjustment with instructions to issue the requested variance to petitioners.
REVERSED AND REMANDED.