Jan72026
Estate Planning Q&A Series

How do I set up an agreement so my adult child can live in my parent’s house and make payments without everyone getting into legal trouble later? – North Carolina

Short Answer

In North Carolina, the safest way to avoid problems later is to put the arrangement in a written, signed agreement that matches what is really happening: either a landlord-tenant lease (rent), a family loan (repayment), or a written contract to buy an interest in the home (sale). If the plan involves any future transfer of the house (or an interest in it), North Carolina’s “statute of frauds” generally requires a writing signed by the person who owns the property. The right document depends on who holds title now and whether the payments are meant to be rent, reimbursement, or a path to ownership.

Understanding the Problem

In North Carolina estate planning, this question usually comes up when a family wants an adult child to live in a parent’s home while making regular payments, and the family wants those payments to be treated fairly and documented clearly. The decision point is whether the payments are meant to create a right to live there only, or a right to eventually own some or all of the house. The key trigger is who currently holds legal title to the home and who has authority to sign documents for the owner.

Apply the Law

North Carolina law treats “living in the home and making payments” very differently depending on whether the arrangement is a lease, a loan/reimbursement plan, or a contract that affects ownership. If the arrangement is intended to sell or convey an interest in real estate (now or later), it generally must be in writing and signed by the party to be charged. If the arrangement is a “contract for deed” (an installment sale where the deed transfers later), North Carolina has specific minimum content and recording rules. If the arrangement is a rental, North Carolina landlord-tenant rules control how the tenancy can end and how an eviction must be handled if things go wrong.

Key Requirements

  • Confirm the owner and authority: The agreement should be signed by the current record title holder (often the surviving parent) or a properly authorized agent.
  • Put the deal in writing with clear labels: The document should clearly state whether payments are rent, reimbursement/loan payments, or purchase payments toward ownership.
  • Match the document to the goal (possession vs. ownership): A lease documents the right to occupy; a loan documents repayment; a real-estate purchase arrangement documents a path to ownership and may require recording steps.

What the Statutes Say

Analysis

Apply the Rule to the Facts: Here, expenses have been paid related to a living parent’s home after the other parent died, and the home appears to have transferred to the surviving parent. That means the surviving parent is likely the person who must sign any lease or any agreement that creates a right to buy or receive the home later. If the family wants the adult child’s payments to count toward ownership, North Carolina generally requires a written, signed agreement for any contract to convey an interest in land, and a “contract for deed” has additional required terms and recording steps. If the family only wants a stable living arrangement with payments that function like rent or shared expenses, a written lease (or occupancy agreement) usually reduces later disputes about whether the payments were “rent” or “buying the house.”

Process & Timing

  1. Who signs: The current record owner (often the surviving parent). If someone signs as agent, confirm a valid power of attorney and record it when required for real property actions. Where: If recording is needed, the Register of Deeds in the county where the property is located. What: One of the following, depending on the goal: (a) a written lease/occupancy agreement; (b) a written family loan/reimbursement agreement (often paired with a lease if the adult child will live there); or (c) a written purchase agreement/contract for deed (and, when appropriate, a recorded memorandum). When: Before the adult child moves in under the new terms or before payments start being treated as “purchase payments.” If using a contract for deed, the statute requires the seller to record a copy or memorandum within five business days after signing and acknowledgment.
  2. Document the money flow: Set a fixed monthly amount, due date, and what it covers (taxes, insurance, repairs, utilities). Use a single payment method and keep a ledger so later it is clear whether payments were rent, reimbursement, or purchase payments.
  3. Plan for the “what ifs”: Include what happens if the living parent needs to sell, move to assisted living, or if the adult child stops paying. If the arrangement is a rental, the agreement should align with North Carolina eviction rules (possession changes only through the legal process if there is a dispute).

Exceptions & Pitfalls

  • Using the wrong document: Calling payments “rent” in practice but “purchase payments” in conversation (or vice versa) is a common source of later family conflict and probate disputes. The written agreement should match the real intent.
  • Signing without authority: If someone other than the owner signs (for example, an adult child signing for the parent), the authority needs to be clear. Real estate transactions often require a properly executed and recorded power of attorney.
  • Accidental “contract for deed” issues: Informal “pay me each month and the house will be yours later” arrangements can trigger contract-for-deed concerns. North Carolina imposes specific content and recording requirements for contracts for deed, and noncompliance can create major enforcement problems.
  • Eviction and possession misunderstandings: If the adult child is treated as a tenant, North Carolina law generally requires the statutory eviction process to remove a residential tenant in a dispute. Trying to change locks or shut off utilities can create legal exposure.
  • Estate and creditor complications: If the living parent later dies or becomes incapacitated, unclear paperwork can lead to disputes among heirs, problems with the estate administration, or questions about whether payments were gifts, rent, or loans.

Conclusion

In North Carolina, the best way to avoid legal trouble later is to use a written agreement that clearly states whether the adult child’s payments are rent, repayment of a family loan, or payments toward a future transfer of the home. Any deal that is meant to sell or convey an interest in the house generally needs a signed writing, and a contract for deed has extra required terms and recording steps. The most practical next step is to confirm the current title owner and then sign the correct written agreement before treating any payments as ownership-related.

Talk to a Estate Planning Attorney

If you’re dealing with a family arrangement where an adult child will live in a parent’s home and make payments, our firm has experienced attorneys who can help document the plan clearly and reduce the risk of future disputes. 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: Estate Planning Q&A Series

Author: Pierce Law

Pierce Law Group is a North Carolina law firm focused on probate administration, real estate partition matters, and surplus funds claims across North Carolina. We know these situations often come with stress, family dynamics, and time-sensitive decisions—so we prioritize clear communication, steady guidance, and a practical plan from day one. Our goal is to make a complicated process feel manageable, while protecting what matters most to you.