NC property owners likely owed millions after Map Act reversal — lawmakers respond by capping interest

The Fayetteville Outer Loop is a North Carolina Department of Transportation (NCDOT) project which has been restricting property owners since it was first identified in the NCDOT’s corridor map in 1992 – 24 years ago. Construction didn’t begin until well over a decade later. And the project has several more years to go.

When completed, the 39-mile-long freeway will bypass Fayetteville and connect Fort Bragg to I-95. That’s good news for local Fayetteville traffic and interstate travelers who will finally be able to skirt the city without getting ensnarled in local traffic.

But this project has been nothing but bad news for more than 300 property owners in the Loop’s path.

They’ve been stuck in limbo for years – more than 20 years in many cases. Why? The North Carolina Map Act limited them from improving, subdividing, or developing their land once the state targeted it for future development. And they are very unlikely to be able to sell their property for a fair price because of all the restrictions potentially limiting its value.

Being in limbo is one thing.

Being stuck is another.

Being cheated out of the American Dream is, quite frankly, unconstitutional.

That’s what the North Carolina Supreme Court ruled in June, after hearing from Winston-Salem landowners stuck in a similar situation over delays of the Winston-Salem Northern Beltway in Forsyth County. After decades, these property owners finally said enough is enough, and challenged the Map Act all the way to the NC Supreme Court.

What is the North Carolina Map Act?

The short answer is the North Carolina Map Act gave the government the right to restrict property owners from developing, subdividing, or making certain improvements to their properties that lie within a future road corridor. Only 12 other states have Map Acts. The state insists the Map Act was intended to keep costs low by preventing any development or improvements that might raise the price or “just compensation” they would eventually have to pay owners.

Eventually is the key word.

Sometimes these projects are earmarked for use decades before the state exercises its eminent domain rights, as is the case with the Fayetteville Outer Loop. That means, under the Map Act property owners were stuck with land, homes, and businesses that had restrictions imposed on their rights to improve or develop. They weren’t likely to be able to sell or lease their property either. Who wants property in the NCDOT’s crosshairs?

Because of the lengthy time it can take from the date the NCDOT earmarks a future road corridor until they pay landowners for their property, the Map Act essentially left property owners in a Catch 22 situation.

Meanwhile, the NCDOT enjoyed a free lay-away plan.

Map Act deemed unconstitutional

Yet the tables turned in June 2016 when the NC Supreme Court determined the NC Map Act to be “unconstitutional” and “unfair” to landowners who were stuck like North Carolina tar on the road to progress.

Kirby v. NCDOT: Supreme court sides with the people

Landowners in Forsyth County sued the NCDOT over properties that were earmarked for the Winston-Salem Northern Beltway, yet sat idle for decades. When the case was brought before the NC Supreme Court, judges unanimously voted in favor of the landowners saying the state cannot restrict development of land needed for future highways indefinitely without compensating the property owners. That would be a taking of private property through the process of eminent domain, but without paying just compensation.

NCDOT may owe landowners millions

Fayetteville and Winston-Salem property owners aren’t the only ones who will reap the benefits of this landmark ruling. Thousands of landowners across the state whose land has been rendered moot for decades are likely owed millions. Here are just a few of the projects and dates when the NCDOT registered them as a future project, according to a John Locke Foundation report.

NC legislature limits interest owed to property owners

Just as thousands of these frustrated property owners began to see a light at the end of the tunnel, the NC Legislature came along with a dimmer switch. Less than a month after the state Supreme Court declared the Map Act unconstitutional, the North Carolina General Assembly responded with a new bill that not only limits the back interest it will pay property owners, but caps that interest at 8%. This bill limits the previous 8% interest rate paid to landowners in eminent domain condemnation cases, to a floating prime rate at the time the property is taken. (The current prime rate is 3.5%.)

Get a FREE case evaluation from North Carolina eminent domain attorneys

We believe that is unfair to North Carolina property owners who, in many instances and for many years, have been at the mercy of the state. Other Map Act states offer more protection to its property owners than North Carolina, according to a John Locke Foundation study.If the government is seeking to condemn your property or restrict the use of your land, we can negotiate on your behalf. Our North Carolina eminent domain lawyers (four of whom previously worked on behalf of the NCDOT) can review your case for free. Call 1-877-393-4990, or get a FREE case evaluation.