Old North News

Paula Smith was forced to wait more than 10 years to sell her Kernersville, North Carolina, home because the property was in the way of a state Department of Transportation roadway project.

"Our initial reaction was that it's unbelievable," Smith told Old North News. "The state can't do this. They can't have control of our house and tell us that we can't sell it. This is not right."

 But it took 11 years and an attorney to file a lawsuit before Smith and her spouse, Kenny, were finally compensated.

Paula and Kenny Smith after settling with the Department of Transportation | Paula Smith

“In 1989 or so, the state passed a law allowing the department to file roadway maps, which said you can't make any changes to your property, you can’t subdivide it, you can't rezone it or anything else because that would have increased the value of the property when they got around to buying it,” said Matthew Bryant, Smith’s attorney.  

Smith was on a perpetual hold along with more than 300 other homeowners because their property was located along a planned future loop stretching 34 miles.

“These folks were stuck and the department, basically, made their houses unmarketable because everyone knew you couldn't do anything with the property due to the fact that there was going to be a road there and it stayed that way for decades,” Bryant told Old North News. “This was a bigger problem than just a few pieces of property here and there.”

The North Carolina Map Act lowered the price of land targeted by the North Carolina Department of Transportation by preventing development until the department started its planned project. What made the North Carolina law more egregious than in other states was that there was no time limit.

“Other states didn't have never-ending development restrictions,” Bryant said in an interview. “Every state prohibits imposing restrictions that have no police powers connected to them. The state of North Carolina had no obligation to pay you at any point in time and then your properties were undevelopable. It was a perfect storm for homeowners sitting on, in some instances, millions of dollars worth of property that they couldn’t get value out of.”

In response, Bryant filed more than 500 lawsuits in several different counties but the road to victory took time. 

“We filed in 2010, lost all of our hearings through 2015, then we got to the court of appeals and won and we have not lost a hearing since February 2015,” Bryant said.

Smith finally was able to sell her home at an advantageous price last year.

"I'm still in the midst of this with the DOT, trying to get our closing costs paid but they are nickeling and diming us to death over it," Smith said in an interview. "It's politics. It's the good old boy network. It's based on where the governor gets their money. It's Republicans. It's Democrats."

No state had tried this gimmick to the same degree that North Carolina had, according to Bryant, and one of the most tragic losses that occurred involved Mike Hendricks who lost a deal to develop eight acres for more than $1 billion in the 1990s as a result of the law.

“He was one of the very first people to file one of these lawsuits,” said Bryant. “He had a nice piece of property and they were going to put a shopping center on it but the deal completely fell through because everybody knew the road was coming through. He never received his lawsuit's victory because he passed away from a stroke. He wasn't a particularly old guy but that land had been tied up. Those stories repeat themselves over and over where folks had opportunities or were stranded in their properties and they passed away.”