Two NC decisions narrow who can enforce a restrictive covenant
Two NC decisions narrow who can enforce a restrictive covenant
2026-09-12 · North Carolina · Courts
Two published North Carolina Court of Appeals decisions in the last sixteen months have tightened the answer to a question associations rarely examine until they are in court: who has the right to enforce a restrictive covenant, and who can be sued on it. Both came out on standing grounds, and in one of them the defect was jurisdictional.1
Prevette v. Elsner: a neighbor with no reciprocal restriction cannot enforce
Decided May 7, 2025 out of Rockingham County, Prevette v. Elsner holds that a neighbouring landowner lacks standing — and that the trial court therefore lacks subject-matter jurisdiction — to enforce restrictive covenants burdening an adjoining lot, where the plaintiff's own deed contains no reciprocal restriction on the grantor's retained land and there is no recorded common scheme of development.
The plaintiffs could enforce on neither available theory. Not as covenants at law, for want of privity and of a benefit running to their land. And not as equitable servitudes, because there was no evidence of a common scheme of development and no plat establishing one.
The preliminary injunction was dissolved and the judgment vacated. Because the defect was jurisdictional, it was not something the plaintiffs could cure by amendment or waiver.
Valle Cay: enforceable against the owner of the burdened tract, and no one else
Decided February 4, 2026 out of Watauga County, Valle Cay Property Owners Association v. Slocum Mountain Real Estate, LLC addresses the other side of the question.
The association sued an LLC that owned the burdened tract and two individuals connected to it. The Court of Appeals held the complaint was improperly dismissed as to the LLC but properly dismissed as to the two individuals, on a plain principle: “real covenants may only be enforced upon servient estate owners,” and the individuals' names did not appear in the deed.
On pleading a covenant that runs with the land, the court restated the three-element test from Runyon v. Paley, 331 N.C. 293 (1992) — touch and concern, privity, and intent — plus the notice requirement, and held two things that make enforcement easier:
- Being signatories to a consent judgment, or their successors in interest, may satisfy horizontal privity even without a conveyance of an estate in land.
- A deed referencing an incorporated memorandum of settlement adopted by a consent judgment suffices at the pleading stage to charge a purchaser with notice, even where the covenants sit in a separate instrument.
What it changes for boards and managers
These are not exotic appellate points. They decide whether an association's enforcement action survives the first motion, and they bear on three situations that arise constantly.
1. Suing the wrong defendant. Valle Cay is a direct warning. Associations routinely name the people they have been dealing with — the individual who signed the architectural application, the member who attended the hearing, the principal behind an LLC that owns the lot. If the lot is titled in an entity, the entity is the servient estate owner and the individuals are not proper defendants on a real covenant, however involved they were. The claims against them will be dismissed, with costs and delay attached.
The corollary matters for assessment collection too: the covenant runs against the land and its owner of record. Title, not conduct, determines who can be sued.
2. Neighbour-versus-neighbour disputes the association is asked to join. Prevette is the case to have in mind when one owner asks the association to back their action against another, or brings their own suit and expects support. Where the community has a properly recorded common scheme or a declaration binding both lots, enforcement rights exist. Where it does not — older subdivisions, lots sold off piecemeal by a developer, communities where restrictions were placed in individual deeds rather than a recorded declaration — an individual neighbour may have no standing at all, and the defect is jurisdictional.
3. Communities without a clean declaration. This is the underlying exposure both cases expose. A North Carolina association's enforcement power ultimately rests on a recorded instrument that binds the lots and benefits them reciprocally. Associations formed over time, or covering sections added by separate instruments, or relying on deed-by-deed restrictions, may find their enforcement rights are not uniform across the community. That is worth knowing before an enforcement action, not during one.
The helpful half of Valle Cay
It would be wrong to read these as uniformly restrictive. Valle Cay's holdings on privity and notice are distinctly favourable to associations seeking to enforce.
Horizontal privity has long been the technical hurdle most likely to defeat a real covenant in North Carolina, because it traditionally requires the covenant to be created in connection with a conveyance of an estate in land. Holding that consent-judgment signatories and their successors may satisfy it opens enforcement in situations — settled boundary disputes, negotiated development agreements, litigation resolutions — where a strict reading would have closed it.
The notice holding is similarly practical. Covenants frequently live in a document the deed references rather than reproduces. Holding that an incorporated memorandum adopted by consent judgment charges a purchaser with notice at the pleading stage means an association does not lose at the outset simply because its restrictions are not printed in the chain of title.
Both are pleading-stage holdings on a Rule 12(b)(6) motion, so neither guarantees the association ultimately wins. They establish that it gets past the door.
How this fits the other 2025–2026 decisions
Set beside Villazon v. Osborne, where a nuisance covenant was void for vagueness, and Schroeder, where an evaluative term went to a jury, a pattern is visible across the North Carolina appellate docket.
The courts are not hostile to covenant enforcement. They are insisting on the formal prerequisites: a covenant clear enough to apply, a plaintiff with a benefit, a defendant who owns the burdened land, and a factfinder for anything evaluative. An association with a well-drafted declaration, a clean chain, and consistent practice is in a strong position. One relying on general language, assumed standing, or informal enforcement is meaningfully worse off than it was two years ago.
What to watch next
No petition for discretionary review has been located in either case, but North Carolina's public appellate docket system does not reliably return docket sheets, so treat that as unverified rather than as confirmation.
The open question sitting behind both is the Marketable Title Act, which may extinguish covenants older than thirty years in some circumstances. Several such cases are reported to be pending at the Court of Appeals, and no published decision has resolved it for planned communities. That is the larger version of the same question these two cases answer at the margins: whether the covenant is enforceable by anyone at all.
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