Can I argue bad faith if the co-owner delays paying their share of mortgage and carrying costs? – North Carolina

Short Answer

Under North Carolina partition law, a co-owner’s late or missing payments are usually handled through an equitable accounting—credits and reimbursements for necessary expenses like mortgage interest, property taxes, insurance, and essential repairs. “Bad faith” is not a stand-alone claim in partition, but persistent nonpayment can influence how the Clerk allocates costs and, in extreme cases, may support sanctions for abusive filings. Preserve receipts and ask the court to pay your proven carrying costs from sale proceeds before any division.

Understanding the Problem

In North Carolina, can you, as a co-owner, claim “bad faith” because the other co-owner delays paying their share of the mortgage and carrying costs in a partition case? You’re the petitioner now, you asked for carrying costs without locking in amounts, you’re considering a negotiated buyout versus a commissioner sale, and you’re serving through the ePortal while waiting on the other co-owner’s payments.

Apply the Law

North Carolina partition is an equitable special proceeding before the Clerk of Superior Court in the county where the property lies. The court (and any appointed commissioner) can conduct an equitable accounting between co-owners. Typically, a paying co-tenant receives reimbursement or credits for necessary expenditures that preserve the property—such as mortgage interest, taxes, insurance, and essential repairs—and offsets are applied for any rental income or exclusive possession issues. Nonpayment by a co-owner is addressed through these credits rather than a separate “bad faith” claim. Allegations of litigation misconduct are addressed under the Rules of Civil Procedure and the court’s cost-taxing authority.

Key Requirements

• Show co-tenancy and necessity: Prove both of you co-own the property and that the expenses (mortgage interest, taxes, insurance, necessary repairs) were reasonable and necessary to preserve it.
• Document amounts: Provide clear, itemized proof (statements, invoices, receipts, proof of payment) and the time periods covered.
• Ask for equitable accounting: Request reimbursement or credits, and that they be paid from sale proceeds before net division or applied in a buyout calculation.
• Account for offsets: Be prepared for offsets for any rents received or, in some cases, for exclusive possession claims.
• Costs and conduct: Seek appropriate cost-shifting; egregious litigation conduct can be addressed through sanctions, not a separate “bad faith” cause.

What the Statutes Say

• North Carolina Gen. Stat. Chapter 46A (Partition) – Governs partition proceedings, including sale by commissioner and equitable allocation.
• North Carolina Gen. Stat. § 1-339.1 (Judicial sales—general) – Sets the framework for court-ordered sales, notices, reporting, and confirmation.
• North Carolina Gen. Stat. § 6-21 (Costs) – Allows courts to tax costs in special proceedings and apportion them among parties.
• North Carolina Gen. Stat. § 1A-1, Rule 11 (Sanctions) – Authorizes sanctions for improper pleadings or filings made without a proper basis.

Analysis

Apply the Rule to the Facts: You have already asked for carrying costs without fixed amounts, which is fine at the outset, but the Clerk will ultimately require itemized proof before awarding reimbursement. If the co-owner delays or refuses to pay, your remedy is to seek credits and reimbursement in the equitable accounting and to have those amounts paid from sale proceeds before any split. If you pursue a negotiated buyout, incorporate the same credits into the price; if you pursue a commissioner sale, ask that your proven carrying costs be paid first from the proceeds.

Process & Timing

1. Who files: Any co-owner (you, as petitioner). Where: Clerk of Superior Court in the county where the property is located. What: Verified partition petition under Chapter 46A requesting partition (in kind or by sale), appointment of a commissioner if needed, and an equitable accounting/credits for carrying costs. When: Early in the case; serve respondents per Rule 4. Respondents typically have about 30 days to respond after service.
2. The Clerk holds a hearing to decide partition in kind versus sale and may appoint a commissioner. If a sale is ordered, the commissioner gives notice, conducts the judicial sale, and files reports. Upset-bid periods and county practices can extend timelines.
3. The court confirms the sale, then applies proceeds: costs of sale and proceeding, liens, then co-owner shares. Ask the Clerk to approve and pay your documented carrying costs from the proceeds before distribution or to apply credits in a buyout order.

Exceptions & Pitfalls

• Only necessary, preservation expenses (mortgage interest, property taxes, insurance, essential repairs) are typically reimbursable; discretionary upgrades usually are not.
• If you had exclusive possession or collected rents, expect offsets that can reduce your reimbursement.
• “Bad faith” labels without specifics can backfire; rely on documented nonpayment and request credits, cost apportionment, or sanctions only where warranted.
• Generic “carrying costs” requests are not self-executing—attach invoices, statements, and proof of payment tied to dates.
• Using the ePortal does not replace proper Rule 4 service to start the case; confirm service to avoid delays or challenges.

Talk to a Partition Action Attorney

If you’re dealing with a co-owner delaying mortgage or carrying costs in a partition case, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at [919-341-7055].

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.