Dec182025
Partition Action Q&A Series

If someone else (like a relative) paid certain property bills, can the co-owner still demand reimbursement from the sale proceeds? – North Carolina

Short Answer

Sometimes. In a North Carolina partition (including a partition sale), a co-owner can ask the court to credit certain “carrying costs” and other protected payments against the sale proceeds, but the claim usually works best when the co-owner personally paid the bills or can prove the payments were made on that co-owner’s behalf. If a third party paid as a gift or as a “volunteer,” the co-owner may have a harder time showing a right to contribution from the other co-owner’s share.

Understanding the Problem

In North Carolina, can a co-owner in a partition sale ask the court to reimburse property-related bills from the sale proceeds when someone else, such as a relative, actually paid those bills? The practical issue is whether the paying arrangement counts as the co-owner’s “payment” or a payment “on behalf of” that co-owner for purposes of a contribution credit in the partition case. The question usually comes up when one co-owner has been in the home and bills have been handled informally through family support.

Apply the Law

North Carolina’s partition statutes allow a cotenant (co-owner) to seek contribution for certain expenses tied to preserving the property and protecting the cotenants’ interests. In a partition sale, the request is made during the partition case so the court can adjust how sale proceeds get divided. The court focuses on (1) whether the expense qualifies, (2) whether the claimant can prove the amount and that it was properly attributable to the shared property, and (3) whether any limits apply (including limits tied to exclusive possession and tax lookback rules).

Key Requirements

  • Qualifying expense: The bill must fit a category that North Carolina treats as reimbursable in a partition accounting (for example, carrying costs such as property taxes, insurance, necessary repairs, and payments on a purchase loan; and certain taxes/encumbrance payments addressed by separate tax statutes).
  • Proof of payment and attribution: The co-owner seeking the credit must be able to document the expense, show it relates to the property, and show why the payment should be treated as that co-owner’s payment (including when a third party paid “on behalf of” the co-owner rather than as a gift).
  • Limits and offsets: Some reimbursement rights can be limited by timing rules (such as limits on older tax payments) or reduced/offset by other equitable adjustments in the case, including issues tied to exclusive possession for certain categories.

What the Statutes Say

Analysis

Apply the Rule to the Facts: The facts describe a co-ownership where one co-owner has lived in the home and bills like the mortgage and utilities have been paid, sometimes with informal help. If the co-owner seeking reimbursement can show the bills qualify as reimbursable “carrying costs” (for example, property taxes, insurance, necessary repairs, or payments on a loan used to acquire the property) and can also show the payments were made by that co-owner or on that co-owner’s behalf (rather than as a no-strings gift by a relative), the court can credit those amounts in the partition sale accounting. If the payments were utilities or other non-preservation personal living expenses, or if the payer was a true “volunteer” with no right of repayment, the court may deny or reduce the requested credit.

Process & Timing

  1. Who files: A cotenant seeking reimbursement/credit. Where: The Clerk of Superior Court in the county where the real property sits (partition is commonly handled as a special proceeding). What: An application/motion in the partition proceeding requesting contribution/credits and attaching supporting documentation (receipts, lender statements, insurance declarations, tax receipts, canceled checks/bank records, and any written repayment agreement with a third-party payer). When: In a partition sale, the statute allows asserting the right to contribution at any time during the partition proceeding.
  2. Accounting and objections: The other cotenant can dispute whether the expense qualifies, whether it was necessary, whether it was paid by (or on behalf of) the claimant, and whether any statutory limits apply (for example, limits tied to older tax payments or interest paid during exclusive possession). The clerk (and sometimes a judge on appeal) resolves these disputes based on evidence.
  3. Distribution: After the sale closes and authorized costs/credits are determined, the net proceeds are distributed. Approved contribution claims are typically handled as an adjustment before the remaining proceeds are split by ownership shares.

Exceptions & Pitfalls

  • Third-party payer issues: If a relative paid bills as a gift, the co-owner may not be able to treat those payments as the co-owner’s reimbursable contribution. Claims are stronger when documents show the payments were made on the co-owner’s behalf with an expectation of repayment (for example, a written agreement, consistent reimbursement to the relative, or clear bank records tying funds to the co-owner).
  • Utilities are often disputed: North Carolina’s “carrying costs” definition focuses on preserving the property’s value and the co-owners’ interests (taxes, insurance, repairs, and acquisition-loan payments). Utility bills can look like personal living expenses tied to occupancy, so they often draw objections and may not be credited the same way as taxes, insurance, necessary repairs, or qualifying loan payments.
  • Exclusive possession limits: North Carolina law can limit reimbursement for certain categories during periods when the paying cotenant had exclusive possession (for example, interest on an existing encumbrance during exclusive possession, and certain necessary-repair claims depending on how the case is framed).
  • Improvements vs. repairs: “Necessary repairs” and “improvements” get treated differently. In a partition, improvements are generally credited only up to the lesser of cost or the value added as of the start of the proceeding, which can be much less than what was spent.
  • Documentation gaps: Cash payments, vague family arrangements, or missing receipts can sink an otherwise valid claim. Lender histories, tax receipts, insurance invoices, and proof of who actually funded the payments matter.

Conclusion

In North Carolina, a co-owner in a partition sale can seek reimbursement (a credit against sale proceeds) for certain qualifying property expenses, especially carrying costs like taxes, insurance, necessary repairs, and acquisition-loan payments. When a relative paid the bills, the key issue becomes proof that the payments were made on the co-owner’s behalf rather than as a gift. The next step is to file a contribution request in the partition proceeding, keeping in mind the 10-year limit on property-tax contribution in the partition case.

Talk to a Partition Action Attorney

If you’re dealing with a co-owner who refuses to cooperate and there is a dispute about who paid the mortgage, taxes, insurance, or repairs, our firm has experienced attorneys who can help explain options and timelines in a North Carolina partition sale. 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.

Category: Partition Action Q&A Series

Author: jpierce

Attorney Jared Pierce is the founder of Pierce Law Group in Raleigh, North Carolina, a firm he established with a dedicated focus on probate administration and estate planning across North Carolina. Born and raised in the Republic of South Africa, Jared moved to Durham with his family in 2001, bringing with him a rich cultural background and a distinctive accent that often serves as a conversation starter.