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Midsouth Golf, LLC v. Fairfield Harbourside Condominium Ass'n, Inc.

Court of Appeals of North Carolina
652 S.E.2d 378 (2007)


Facts

Fairfield Harbour is a property development governed by a set of restrictive covenants known as the Master Declaration. One of the restrictive covenants grants Fairfield Harbour, Inc. (FHI) the right to collect annual fees for recreational amenities. The Master Declaration requires that each owner of property within Fairfield Harbour become a member of the Fairfield Harbour Property Owners Association, Inc. (the Association). FHI maintains the recreational areas while the Association maintains the parks and common areas within Fairfield Harbour. All members of the Association have an easement for the use and enjoyment of the parks and common areas maintained by the Association. Over time, FHI developed time share communities (defendants) within Fairfield Harbour. FHI recorded restrictive covenants for the time share communities, including the covenant to pay annual fees for recreational amenities as referenced in the Master Declaration. In 1993, FHI sold its recreational amenities to the Harbour Recreation Club, Inc. (HRC). FHI and HRC added another restrictive covenant that entitles the owner of the recreational amenities to collect amenity fees from the time share units at 5.556 times the rate charged to Fairfield Harbour lot owners. In 1998, the amount of amenity fees charged to time share units was under dispute. HRC and the defendants entered a settlement agreement that prohibited HRC from charging the time share units a higher amenity fee than those charged to individual lot owners. In 1999, HRC sold the recreational amenities to Midsouth Golf, LLC (Midsouth) (plaintiff) pursuant to a purchase agreement. The agreement referenced the Master Declaration and the 1993 restrictive covenants, but not the 1998 settlement agreement. Midsouth also sells golf and social memberships for access to the recreational amenities to members of the public who do not own property in Fairfield Harbour. Until 2004, the defendants paid the same amenity fees as individual lot owners. But in November 2004, Midsouth filed suit, asserting its right to assess amenity fees against the defendants at a rate of 5.556 times the rate charged to individual lot owners. The defendants argued that the covenant to pay an amenity fee found in the Master Declaration was a personal covenant and was not binding on them. The trial court granted partial summary judgment in favor of the defendants.

Rule of Law

Issue

Holding and Reasoning (McGee, J.)

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