NC court: an architectural committee's discretion is broad but not arbitrary
NC court: an architectural committee's discretion is broad but not arbitrary
2026-09-12 · North Carolina · Courts
A North Carolina architectural review committee holds broad discretionary power, but it cannot exercise that power arbitrarily — and whether it did is a question for trial, not for summary judgment. The Court of Appeals decided Smith v. Forge Creek at Flowers Plantation Homeowners Association on May 20, 2026, in a published opinion out of Johnston County.1
The result is unusual and worth noting up front: neither side won. The owners violated the declaration as a matter of law and the association could not get judgment, because the reasonableness of its committee's decision remains to be tried.
The facts
The owners sought approval from the Architectural Review Committee to widen their driveway. The ARC granted a conditional approval specifying a width. The driveway as built exceeded it — by roughly nine and a half to eighteen inches.
The trial court granted summary judgment to the owners and denied it to the association, and issued a preliminary injunction.
What the court held
On the violation. The court held as a matter of law that the owners did violate the declaration by exceeding the written conditional approval. Building beyond what the ARC approved is a breach, and the modest size of the excess did not change that.
On the ARC's discretion. That holding “does not end our analysis.” Covenants granting an architectural committee broad discretionary power are enforceable — the court cited Raintree Homeowners Ass'n v. Bleimann, 342 N.C. 159 (1995) — but the committee's exercise of that power “cannot be arbitrary” and must be made “reasonably and in good faith.”
Whether the ARC's refusal to approve the full requested width was arbitrary, unreasonable, or in bad faith was held to be a genuine issue of material fact for trial. Summary judgment for the owners was vacated; the denial of summary judgment to the association was affirmed; and the case was remanded for trial.
On the injunction bond. Separately, the court held that a trial court's failure to “expressly consider the question of requiring a bond” before issuing a preliminary injunction is reversible error, and that the obligation sits with the court — it “does not depend on a party's request.” The preliminary injunction was vacated.
What it changes for boards and managers
The operative shift is about what an association has to be able to show, and when.
Under Raintree, North Carolina associations have long relied on the proposition that a declaration granting an ARC discretion over aesthetics will be enforced without a court second-guessing taste. Forge Creek does not disturb that. What it makes concrete is the limit that has always been stated alongside it: discretion exercised arbitrarily or in bad faith is not protected, and an owner who raises that is entitled to a factfinder.
That has a direct consequence for how architectural decisions should be documented:
- Record the reason, at the time. A conditional approval that specifies a dimension but gives no basis for it is the hardest kind of decision to defend two years later. The reason does not have to be elaborate; it has to exist contemporaneously.
- Apply the standard consistently, and be able to prove it. The most effective evidence of non-arbitrariness is a record of comparable applications decided the same way. The most effective evidence of arbitrariness is a comparable application decided differently.
- Expect the reasonableness question to survive to trial. This is the expensive part. An association that is plainly right on the violation may still face a jury on whether its committee behaved reasonably — which means the cost of enforcing a nine-inch overage is not proportionate to nine inches.
The last point deserves emphasis because it cuts against the instinct to enforce every deviation. Forge Creek establishes that winning the violation question does not end the case. An association weighing enforcement on a marginal overage is, after this decision, weighing a trial.
The bond holding, which is the sleeper
The Rule 65(c) holding is narrower but it is immediately useful, and it applies to both sides.
A preliminary injunction — the tool an association uses to stop construction mid-project, and the tool an owner uses to stop enforcement — now carries a requirement that the trial court expressly consider whether to require security, on its own initiative. Failure to do so is reversible error, and the injunction here was vacated on that basis.
There is a contrast worth knowing. In an unpublished 2025 decision involving a Wilmington condominium association, a Rule 65 bond argument was held not preserved because it was never raised at the hearing. Forge Creek is published and holds the duty is the court's regardless of request — so the two are reconcilable only on the footing that the published rule now governs. A party seeking or opposing an injunction should still raise the bond at the hearing rather than rely on the court to do it.
How it fits the 2025–2026 line
Three North Carolina appellate decisions in fourteen months have now taken evaluative covenant questions away from summary judgment and given them to a factfinder.
In Schroeder, the Supreme Court held that whether animals were “household pets” was for the jury once the judge had construed the covenant. In Forge Creek, whether an ARC acted arbitrarily is for trial once the judge has found a breach. In Villazon, the court took the opposite route only because the covenant was too vague to enforce at all.
The pattern that emerges: in North Carolina, where a covenant dispute turns on characterisation or reasonableness, expect it to be tried. Associations and owners alike should price settlement and mediation against that, not against a motion.
What to watch next
No petition for discretionary review has been located, though North Carolina's public docket system does not reliably return docket sheets, so that is “not found” rather than confirmed.
The case itself returns to Johnston County for trial on the arbitrariness question. A trial-level outcome will not create precedent, but it will be the first concrete data point on what a North Carolina factfinder makes of an ARC's refusal — and on what an association's documentation has to look like to survive one.
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