How can I make sure the commissioner credits the delinquent property taxes I paid before the sale when the proceeds are split multiple ways? – North Carolina

Short Answer

In North Carolina partition sales, necessary carrying costs that preserved the common property—like delinquent property taxes—are paid back from the sale proceeds before the net is split among co-owners. To secure the credit, submit clear proof of payment to the commissioner and, if the proposed distribution omits or undercredits it, file written exceptions with the Clerk of Superior Court before the order of distribution/confirmation. If the taxes were paid to stop foreclosure, the payer can often claim priority repayment up to the amount paid.

Understanding the Problem

Can a North Carolina co-owner ensure the commissioner credits delinquent property taxes paid before a court-ordered partition sale when the proceeds must be split among several co-owners? The decision point is whether, and how, those tax payments get reimbursed from the sale proceeds before equal distribution. The key actors are the co-owner/heir, the commissioner, and the Clerk of Superior Court, and the timing is before the clerk confirms the sale or enters the order of distribution.

Apply the Law

Under North Carolina law, a co-owner who paid necessary expenses that preserved the common property—such as past-due property taxes to prevent a tax foreclosure—is typically entitled to reimbursement from the sale proceeds before the remainder is divided. Partition sales are conducted under the judicial sales procedure, with the commissioner filing a report, an upset-bid window, and then court approval and distribution under the Clerk of Superior Court’s oversight. Credits must be supported by documentation and raised in time—either directly with the commissioner or by written exceptions filed with the clerk—so they can be included in the order approving distribution.

Key Requirements

• Qualifying expense: The payment was a necessary carrying cost that benefited the whole property (e.g., delinquent property taxes to avoid foreclosure).
• Proof of payment: Provide receipts, county tax records, and bank proofs linking the payment to the parcel and amount cured.
• Timely request: Deliver documents to the commissioner promptly and, if not fully credited, file written exceptions with the Clerk of Superior Court before the distribution order/confirmation.
• Correct forum: The partition file is before the Clerk of Superior Court in the county where the property/partition proceeding is pending.
• Priority and limits: Repayment comes from proceeds before equal splits; no double recovery beyond what was actually paid.

What the Statutes Say

• North Carolina Gen. Stat. § 46A-76 (Partition sale procedures) – Authorizes sales in partition and addresses distribution under court supervision.
• North Carolina Gen. Stat. § 1-339.24 (Report of sale) – Requires the person who conducted the judicial sale to file a report with the clerk.
• North Carolina Gen. Stat. § 1-339.31 (Upset bids) – Establishes the 10-day upset-bid period and filing requirements.
• North Carolina Gen. Stat. § 105-363 (Subrogation for taxes paid) – Allows a person who pays another’s property taxes to be subrogated to the tax lien to the extent paid.

Analysis

Apply the Rule to the Facts: The delinquent taxes paid to stop foreclosure are a necessary expense that preserved the property for all co-owners, so they should be reimbursed from the sale proceeds before equal division. Because receipts were emailed but the credit appears short, the co-owner should submit complete, itemized proof to the commissioner and, if needed, file written exceptions in the partition case before the clerk enters the order confirming the sale/distribution. If mailed notice was not received, promptly request copies of the report and proposed disbursements and ask the clerk to allow time to review and object. Fees for the realtor, commissioner, and attorneys are typically paid off the top, but they should be itemized so the co-owner can see whether retainers/hearing time were included.

Process & Timing

1. Who files: Any co-owner seeking credit. Where: Clerk of Superior Court in the county where the partition special proceeding is pending. What: A written “Exceptions/Objections to Commissioner’s Report and Proposed Distribution,” attaching tax receipts, county printouts, bank records, and prior emails. Also request an itemized fee statement and a recap of disbursements. When: File before the clerk confirms the sale or enters the distribution order; an upset-bid window runs for 10 days after the report of sale is filed (see G.S. 1-339.31).
2. The clerk may set a hearing and require the commissioner to amend the report with itemized disbursements and supporting documents. Timing varies by county; expect a few weeks from filing to a hearing, depending on docket and notice.
3. After objections are resolved, the clerk enters an order approving the report and distribution. The commissioner then disburses funds. Payment is commonly by check; if a wire is preferred, request that method in writing and provide a W-9 and wire instructions. The order or commissioner’s procedures may govern transfer method and any wire fee.

Exceptions & Pitfalls

• Not every expense qualifies. Routine improvements or personal betterments may not be reimbursed absent agreement; delinquent taxes to stop foreclosure typically qualify.
• Documentation gaps. Email confirmations alone may not suffice—include stamped county receipts, account IDs, and bank proofs tying payments to the parcel and amount cured.
• Notice issues. If mailed notice was not received, promptly ask the clerk for the report and proposed disbursement recap and request time to object; the clerk can hold distribution to address timely exceptions.
• Fees off the top. Realtor, commissioner, and court-approved attorney fees are paid before owner distributions; ask for itemized invoices to ensure no double counting.
• Priority via taxes. If subrogation to the tax lien applies, repayment is made from proceeds before equal division but only up to the amount actually paid.

Talk to a Partition Action Attorney

If you’re dealing with a partition sale and need to ensure pre-sale tax payments are credited before proceeds are divided, 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.