An Bord Pleanala has upheld a decision to refuse permission for 15 houses in Tydavnet.
The applicants argued that there was a need for the development and that planning issues were unfounded.
The development was to consist of 15 houses in the north Monaghan village, a mix of semi-detached and terraced two and three-bed homes.
In refusing permission, Monaghan County Council said there were issues with proposed drainage systems and footpaths, and that it wouldn't be in keeping with Tydavnet's character.
Applicants Kevin and Marie McNally appealed this decision to An Bord Pleanala and said there was an absence of a final engineering report to address this issues.
They also pointed out that adequate footpaths could have been included as a condition on a successful application.
They added that it would be similar to other local developments and address the lack of available homes to rent or buy in the village.
Considering all the information, the planning authority said the development was "sub-optimal" in design and was contrary to relevant planning policies.
It concluded that the development would be acceptable in principle, but refused it due to "alleged prematurity of development".
