North Carolina Court Will Decide Permit Taking Claim

The state Supreme Court will determine if long permit processing delays constitute an unconstitutional property taking.

Updated on Oct. 13, 2026 in Construction

Isometric editorial illustration of a yellow construction excavator parked on red clay earth in a forest, representing regulatory permit delays. — The North Carolina Supreme Court will decide if prolonged state permit delays for developer LDI constitute an unconstitutional taking of private property. AI Illustration. Upload story photo >

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The North Carolina Supreme Court is set to rule on whether a two-year permit delay imposed by state regulators constitutes an unconstitutional taking of property. Developer LDI filed the lawsuit after the Department of Environmental Quality refused to process stormwater permits for the Summers Walk development.

Why it matters

The outcome will clarify if administrative delays in the permitting process can be legally classified as property takings, impacting how developers across North Carolina handle regulatory friction. LDI claims the delay caused significant financial losses due to shifting interest rates and increased construction costs during the hold.

The dispute centers on a nearly two-year delay in the permit review process for the Summers Walk development. This duration stands in contrast to the typical timeline for regulatory approvals required for residential construction projects in Brunswick County.

The players

LDI

This real estate development firm is pursuing a lawsuit against state regulators regarding property rights and permit delays.

Department of Environmental Quality

This state agency is responsible for enforcing environmental regulations and managing the permit review process.

North Carolina Home Builders Association

This trade organization represents the residential construction industry and filed a brief supporting the developer.

The details

Regulators withheld the permit unless LDI accepted liability for environmental violations at the unrelated Owendon Plantation site. Although an administrative hearing initially favored the developer, a trial judge later sided with the state before an appeals court allowed the takings claim to move forward.

LDI purchased the Summers Walk property in 2021.
The permit review process remained stalled between 2021 and 2023.
A state Appeals Court ruled in January 2026 that the lawsuit could proceed.
The North Carolina Home Builders Association filed an amicus brief in March 2026.

Market Landscape

This litigation highlights the growing tension between regulatory oversight and property rights within the state construction industry. The Supreme Court ruling will likely influence how firms position themselves against state agencies in future development disputes.

The ruling could affect the future availability and cost of housing in the region by changing the legal risk associated with development permits. Local property owners and builders will see either more regulatory certainty or continued barriers to project approvals based on the court's decision.

The takeaway

This case illustrates the complex intersection between environmental compliance and property development rights. Developers should note that regulatory delays may carry significant financial weight if they result in prolonged litigation or project stagnation.