Discovery and Disclosure of Built-Upon Area

QUESTION: I am in the process of listing a vacant lot located in a watershed area that has additional building restrictions. This is my first time dealing with such regulations, and I would like to understand what these restrictions entail and how to find the specific rules applicable to my client’s property. Should we investigate this type of land restriction, and is it considered a material fact?

ANSWER: The North Carolina Environmental Management Commission (“Commission”) establishes minimum statewide water supply watershed management requirements, which are enforced by local governments. One of the Legislature’s goals for these policies is to maintain, protect, and enhance water quality throughout the state. According to N.C.G.S. Chapter 143, Article 21, the Commission was created to implement, among other things, rules and programs for managing stormwater runoff. To control the volume, velocity, and discharge rates of water from developed or altered land, the impervious surface, or “built-upon area” of a lot, may be limited to a certain percentage of the total area.

By law, the term “built-upon area” (BUA) includes impervious surfaces and partially impervious surfaces, to the extent that the latter do not permit water to infiltrate through the surface and into the subsoil. Surfaces not classified as BUA include grass, sand, pine straw, mulch, wooden slatted decks, swimming pool water areas, surface water, trees, plants, and certain types of landscaping. Common BUA includes materials such as asphalt or concrete, brick, roofing over carports or decks, buildings, and various other hard surfaces.

The local zoning or permitting department in the county or town where the property is located determines the applicable limits, identifies what constitutes BUA for a lot or proposed development, and has the authority to enforce these restrictions. Compliance with these regulations can affect the size of proposed homes and the overall development of the lot. Violating impervious surface limits may require the removal of BUA or the installation of stormwater management systems, which can be costly to design, install, and maintain. In many newer communities, homeowners’ associations (HOAs) are responsible for maintaining stormwater systems that were installed as part of the subdivision’s development.

Due to the importance of BUA restrictions, these regulations are likely to be material facts for prospective buyers of vacant land, or even developed land intended for redevelopment. Listing agents who are aware of specific regulations or have been informed by their clients may include the relevant impervious surface restrictions in their advertisements. Buyer agents, particularly those working with clients looking to build, may consider establishing a policy to consult the local planning or zoning department to identify relevant rules. Additionally, agents should strongly recommend that these clients obtain a survey to accurately evaluate existing conditions or proposed development in relation to applicable regulations.

Release Date: 01/16/2025