What remedies are available if someone records a deed but never pays for it? – North Carolina

Short Answer

In North Carolina, a seller can file a civil action in Superior Court to either cancel (rescind) the deed for failure of consideration or force the buyer to pay (specific performance). Courts can also impose a constructive trust or equitable lien on the property, and the seller can file a lis pendens and seek a temporary restraining order to stop further transfers while the case is pending. The right path depends on the documents signed, timing, and whether the property has been sold to an innocent third party.

Understanding the Problem

In North Carolina real estate, can a seller undo a recorded deed or instead force payment when the buyer never pays? Here, the seller signed documents transferring the home, months passed without payment, and the buyer now claims full ownership. The decision point is whether to unwind the deal or compel payment, and how to protect title while the dispute is resolved.

Apply the Law

Under North Carolina law, recording a deed can transfer title even if the price hasn’t been paid. The seller’s remedies are primarily equitable (rescission/cancellation; constructive trust or equitable lien) and contractual (specific performance to pay or breach-of-contract damages). These disputes are brought in the Superior Court of the county where the property lies. To preserve title while the case is pending, a seller can file a lis pendens and seek a temporary restraining order or preliminary injunction. Timing matters, especially before the buyer conveys to a good-faith purchaser without notice.

Key Requirements

• Rescission/Cancellation: Show a material failure of consideration (no payment), act promptly, and be ready to restore what you received to return both sides to the status quo.
• Specific Performance (Payment): Prove a valid, enforceable contract for the sale, that you performed or were ready to perform, and that the buyer failed to pay.
• Constructive Trust/Equitable Lien: Show unjust enrichment and that the property or its proceeds can be traced; the court can secure the unpaid price against the property.
• Protecting Title During Suit: File a lis pendens and seek injunctive relief to prevent the buyer from transferring or encumbering the property while the case is pending.
• Forum and Timing: File in Superior Court in the county where the land is located; act quickly to avoid prejudice and before a bona fide purchaser complicates title.

What the Statutes Say

• North Carolina Gen. Stat. § 1-254 (Declaratory judgments) – Lets a court declare the parties’ rights and the validity of documents, such as deeds and contracts.
• North Carolina Gen. Stat. § 41-10 (Quiet title) – Authorizes actions to remove clouds from title and determine ownership.
• North Carolina Gen. Stat. § 1-116 (Lis pendens) – Allows filing and indexing notice to alert third parties that title is disputed.
• North Carolina Gen. Stat. § 1A-1, Rule 65 (Injunctions) – Permits temporary restraining orders and preliminary injunctions to preserve the status quo.

Analysis

Apply the Rule to the Facts: Because the buyer did not pay for months after receiving the deed, the seller can sue in Superior Court to rescind the deed for failure of consideration or to compel payment through specific performance. To secure the claim, the seller should file a lis pendens and request an injunction to stop any transfer. If payment will not be made, the court can cancel the deed or impose an equitable lien/constructive trust so the unpaid price is protected against the property.

Process & Timing

1. Who files: Seller/grantor. Where: Superior Court in the county where the property is located. What: Civil Complaint seeking rescission/cancellation of deed or specific performance, plus alternative remedies (constructive trust/equitable lien), and motions for TRO/preliminary injunction; file a Notice of Lis Pendens under G.S. 1-116 with the Clerk and have it indexed and recorded with the Register of Deeds. When: File promptly; many related claims have relatively short limitation periods.
2. After filing, serve the buyer and any necessary parties. Courts may hear a TRO on short notice and schedule a preliminary injunction hearing in the following days or weeks; overall timelines vary by county.
3. If the court cancels the deed, record the court’s order in the Register of Deeds to clear title. If the court orders payment or imposes an equitable lien/constructive trust, follow the judgment to collect or record appropriate liens or orders to update title.

Exceptions & Pitfalls

• Bona fide purchaser risk: If the buyer transfers to an innocent purchaser for value before you file lis pendens, rescission may be unavailable; secure the record early.
• Restoring the status quo: To rescind, be prepared to return any consideration received or address occupancy/benefit issues.
• Equitable defenses: Delay can trigger laches; misconduct can trigger unclean hands; inconsistent positions can trigger equitable estoppel.
• Paperwork matters: If you took back a purchase‑money deed of trust or promissory note, foreclosure or collection remedies may be more direct—review closing documents.
• Parties and service: Name and properly serve all necessary parties (including anyone on title) and record any court order to update the chain of title.

Talk to a Real Estate Attorney

If you’re dealing with a recorded deed and a buyer who hasn’t paid, 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.