What steps do I need to assume the mortgage and buy out my co-owner’s share? – North Carolina

Short Answer

In North Carolina, you can ask the Clerk of Superior Court in the partition case to allot the entire property to you and set a fair payment (called owelty) to your co-owner instead of forcing a sale. You must bring the mortgage lender into the case and get the lender’s written approval to assume or refinance the loan; otherwise, the lien and due-on-sale terms remain. File a timely response, move to join the lender, request an accounting for credits (mortgage, taxes, insurance, repairs), and address offsets for the other party’s exclusive occupancy.

Understanding the Problem

You are a North Carolina co-owner facing a partition case and want to keep the home by taking over the loan and paying the other owner a fair buyout. The key decision is whether you can obtain an allotment of the entire property to you (with an equalizing payment) instead of a sale. One salient fact here: the former co-owner currently lives there alone.

Apply the Law

Partition in North Carolina is a special proceeding before the Clerk of Superior Court in the county where the property sits. The law favors a fair split in kind when practical; when a physical split is not practical, the court may either allot the whole property to one party with an equalizing payment (owelty) to the other, or order a sale with proceeds divided. Lenders and other lienholders should be joined so their interests follow the correct share or proceeds. Responses in special proceedings are due quickly, and raising certain defenses or equitable issues can move the case to a Superior Court judge. Sales ordered in partition must follow the judicial sales procedures if a sale occurs. “Assuming” a mortgage is not automatic—you need the lender’s consent or a refinance; title transfers without lender approval may trigger a due-on-sale clause.

Key Requirements

• Join necessary parties: Ensure the mortgage lender (and any other lienholder) is added so their lien attaches to the right share or proceeds and any buyout can clear title.
• Seek allotment with owelty: Ask the Clerk to allot the entire property to you and set a cash payment to your co-owner instead of ordering a sale, if a fair division or allotment is feasible.
• Accounting and credits: Request credits for your mortgage, tax, insurance, and necessary repair payments, and address offsets for the other party’s exclusive occupancy or any agreed rent.
• Lender approval to assume/refinance: Obtain written lender consent to assume the loan or plan a refinance; otherwise, the existing lien and due-on-sale terms continue.
• Follow special proceeding rules: File a timely answer, serve motions under the Rules of Civil Procedure, and be prepared for transfer to Superior Court if equitable defenses or fact issues are raised.

What the Statutes Say

• North Carolina Gen. Stat. Chapter 46A (Partition of Real Property) – Governs partition proceedings, division, sale, and allotment/owelty options.
• North Carolina Gen. Stat. § 1A-1, Rule 19 (Joinder of necessary parties) – Allows/compels adding parties whose interests are directly affected (e.g., mortgage lenders).
• North Carolina Gen. Stat. Chapter 1, Article 29A (Judicial Sales) – Sets procedures for court-ordered sales if the property is sold.
• North Carolina Gen. Stat. § 1-301.2 (Transfer of special proceedings) – Moves special proceedings to a Superior Court judge when equitable issues or fact disputes are raised.

Analysis

Apply the Rule to the Facts: Because the former co-owner filed without the lender, you can move to join the mortgage lender so any order protects and correctly places the lien. Given you paid the mortgage until mid last year, ask for credits for those contributions; since the other owner lives there alone, address any offset for exclusive occupancy. If the home cannot be fairly split, request allotment to you with an owelty payment, and coordinate lender consent to assume or refinance so you can clear or properly carry the lien and pay the buyout.

Process & Timing

1. Who files: You (as respondent co-owner). Where: Clerk of Superior Court in the county where the property is located. What: File an Answer, a motion to join the lender, and a motion seeking allotment with owelty and an accounting for credits/offsets. When: In special proceedings, answers are typically due within 10 days of service; act promptly because deadlines can be short and county practice may vary.
2. Request mediation or a scheduling order; exchange information on mortgage history, taxes, insurance, repairs, and occupancy. Prepare lender documents for assumption or refinance; lender review can take weeks, and timelines vary by lender and county.
3. If the Clerk approves allotment, the order will set the owelty amount and terms. You then close: obtain lender consent/assumption or complete a refinance, pay the owelty, and record the necessary deed(s) and any owelty lien release or satisfaction.

Exceptions & Pitfalls

• Lender consent: You cannot unilaterally “assume” a mortgage; without approval, a title transfer may trigger a due-on-sale clause. Be ready to refinance if needed.
• Nonjoinder isn’t a permanent shield: Failure to join the lender can delay relief, but the Clerk will usually order joinder rather than dismiss the case outright.
• Sale risk: If allotment is not feasible or equitable, the court may order a sale with proceeds divided under judicial sale rules.
• Credits and offsets: You may get contribution credits for mortgage/taxes/insurance and necessary repairs, but exclusive occupancy by the other owner can lead to a rental-value offset; make a clear record.
• Transfer to Superior Court: Raising equitable defenses or significant fact disputes can shift the case to a judge, changing timelines and procedure.

Talk to a Partition Action Attorney

If you’re dealing with a partition case and want to assume the mortgage and buy out your co-owner, 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.