Covenant Clearinghouse Secures Legal Victory in North Carolina Over D.R. Horton
Covenant Clearinghouse, LLC has won a key legal decision from the North Carolina Business Court regarding its dispute with homebuilder D.R. Horton over the enforceability of a recorded Declaration governing transfer fee obligations. The court denied D.R. Horton's motion to dismiss Covenant Clearinghouse’s lawsuit and ruled that Chapter 39A of North Carolina law, which regulates transfer fees, does not apply because the Declaration was recorded before its effective date in July 2010. The court also rejected D.R. Horton's claim that a purported termination of the Declaration in 2012 was valid under oath as required by the document’s terms. It found that Covenant Clearinghouse had plausibly alleged non-compliance with this requirement, allowing its challenge to proceed on the merits. The ruling reinforces key legal principles regarding real property law and transfer fee declarations in North Carolina. The case will continue after additional interested parties are joined before a full determination is made.
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