Can attorney fees, closing costs, and advances paid on someone’s behalf be taken out before splitting the remaining funds? – North Carolina

Short Answer

Yes. In a North Carolina court-supervised partition sale, the court first pays approved costs of the proceeding and the sale—such as the commissioner’s fee, reasonable attorney fees taxed as costs, and customary closing costs—before distributing the net balance. The court may also award credits for necessary advances (for taxes, insurance, mortgage interest, or essential repairs) so those amounts come off the top or adjust the shares before the remaining funds are split.

Understanding the Problem

The question is whether, in a North Carolina partition action, the court may pay or credit attorney fees, closing costs, and proven advances before dividing sale proceeds among co-owners. The decision point is how the Clerk of Superior Court allocates the fund after a court-ordered sale: which expenses and credits get paid first, and then how any remaining balance is split by ownership interests.

Apply the Law

Under North Carolina partition law, sale proceeds are first used to pay the costs of the proceeding and the sale. Courts may tax reasonable attorney fees as part of the costs in partition. The commissioner or closing attorney typically pays ordinary closing items at settlement. The court can also recognize contribution claims by co-owners for necessary carrying costs (for example, taxes and insurance) or essential repairs, either by reimbursing those from the fund or adjusting each owner’s share. The Clerk of Superior Court oversees confirmation and distribution in the county where the land is located, typically after the sale is reported and a hearing is noticed for distribution.

Key Requirements

• Costs come off the top: Court-approved costs of the proceeding and sale (commissioner’s fee, reasonable attorney fees taxed as costs, recording and transfer charges customarily paid at closing) are paid before splitting the net.
• Attorney fees may be taxed as costs: In partition, the court can award reasonable attorney fees to be paid from the common fund as part of costs.
• Credits for necessary advances: Verified advances for necessary expenses that preserved or protected the property (taxes, insurance, mortgage interest, required repairs) may be reimbursed or used to adjust shares.
• Liens and priorities: Valid liens tied to an owner’s interest or the property are addressed consistent with their priority before final distribution of that owner’s share.
• Forum and timing: The Clerk of Superior Court in the property’s county confirms the sale and holds the distribution hearing; objections to costs, fees, or proposed credits should be raised by the noticed hearing date.

What the Statutes Say

• N.C. Gen. Stat. § 6-21(7) (Attorney fees in partition) – permits reasonable attorney fees to be taxed as costs in partition proceedings.
• N.C. Gen. Stat. § 28A-15-1 (Real property as assets to pay claims) – confirms that real property proceeds paid into an estate are available for estate claims, which can affect distribution when an owner is a decedent’s estate.

Analysis

Apply the Rule to the Facts: Because the sale was a court-supervised partition, the Clerk will first approve and pay costs of the proceeding and the sale, including reasonable attorney fees taxed as costs and typical closing charges. Proven, necessary advances that benefited the property can be reimbursed or accounted for before the net is split. After those items, one co-owner’s half share is calculated from the net; the other share paid to the decedent’s estate is then available to address estate claims under North Carolina law.

Process & Timing

1. Who files: The commissioner or a party. Where: Office of the Clerk of Superior Court in the county where the property is located. What: Report of sale, motion for confirmation (if needed), accounting, and a motion or notice for distribution; fee affidavits and documentation of advances are typically submitted. When: After the sale is reported and set for a distribution hearing; objections should be filed by the noticed hearing date.
2. The Clerk reviews costs of sale (commissioner’s fee, court costs, reasonable attorney fees taxed as costs) and customary settlement charges, and determines any credits for necessary advances based on documentation; timing varies by county but often follows soon after sale confirmation.
3. The Clerk enters an order of distribution directing payment of costs and fees, reimbursement of allowed advances, payment of any liens consistent with priority, and distribution of the net proceeds by ownership share; the order governs disbursements from the fund.

Exceptions & Pitfalls

• Attorney fees must be reasonable and connected to the partition; the court may limit or deny fees not shown to benefit the common fund.
• Advances must be necessary, reasonable, and documented; elective improvements typically are not reimbursed absent proof they increased common value and are allowed by the court.
• Ensure all interested parties receive proper notice of the hearing; lack of notice can delay distribution or lead to challenges.
• Estate involvement can change the payout: proceeds paid to an estate may first satisfy valid estate claims before any beneficiary distributions.

Talk to a Partition Action Attorney

If you’re dealing with a court-supervised partition and have questions about costs, attorney fees, or credits for advances, 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.