Can co-trustees make decisions about trust-owned rental properties if they don’t agree on whether to sell or keep them? – North Carolina

Short Answer

Usually not if there are only two co-trustees. Under North Carolina’s default trust rules, when two co-trustees serve together, they generally must act unanimously, so a deadlock can stop a major decision like selling a trust-owned rental property unless the trust document says otherwise.

When co-trustees cannot agree, common solutions include using a tie-breaker process written into the trust, delegating limited tasks that do not require joint action, or asking the court to give instructions or remove/replace a trustee so the trust can be administered.

Understanding the Problem

In North Carolina trust administration, the key question is whether two co-trustees can move forward with a decision about trust-owned rental properties when one co-trustee wants to sell and the other wants to keep the properties. The decision point is whether the co-trustees have authority to act without agreement, or whether the disagreement creates a deadlock that requires a different process to move the trust administration forward.

Apply the Law

North Carolina starts with the trust document. If the trust document sets a voting rule (for example, “either trustee may act,” “majority rules,” or “one trustee decides real estate issues”), that rule usually controls. If the trust document is silent, North Carolina’s default co-trustee rule generally requires unanimity when there are exactly two co-trustees. That means a sale decision can be blocked by a single “no,” even if both trustees are acting in good faith.

Even when a sale decision is deadlocked, co-trustees still have ongoing duties to manage the rentals prudently and impartially for all beneficiaries. If the deadlock impairs administration, a court proceeding may be needed to break the impasse, including possible removal of a trustee when lack of cooperation prevents effective administration.

Key Requirements

Follow the trust’s decision rule first: The trust instrument may require unanimity, allow one trustee to act alone, or set a tie-breaker. The written terms usually control day-to-day authority.
Default rule for two co-trustees is unanimity: If there are two co-trustees and the trust does not change the rule, major decisions typically require both signatures/approval, which creates a deadlock risk on “sell vs. keep.”
Fiduciary duties still apply during conflict: Co-trustees must act in the beneficiaries’ interests, avoid self-dealing/conflicts, and act impartially between different beneficiary interests (for example, income-focused versus long-term growth).

What the Statutes Say

N.C. Gen. Stat. Chapter 36C (North Carolina Uniform Trust Code) – Contains North Carolina’s core trust administration rules, including default rules for co-trustees and court remedies when administration breaks down.
N.C. Gen. Stat. § 7A-246 (special proceedings; trust administration) – Addresses the superior court division’s role in proceedings involving trustees and trust administration.

Analysis

Apply the Rule to the Facts: Two siblings are serving as co-trustees for multiple trusts and communication is strained. If each trust has two co-trustees and the trust documents do not authorize one trustee to act alone or provide a tie-breaker, the default rule typically makes a “sell vs. keep” decision about trust-owned rental properties a unanimous decision. That means the disagreement can freeze the sale decision, even while the trustees still must keep the properties managed, insured, and accounted for as part of ongoing fiduciary administration.

Process & Timing

Who files: A co-trustee, a beneficiary, or another interested person (depending on the issue). Where: Typically the Clerk of Superior Court (as a trust proceeding/special proceeding) and, for some contested matters, the Superior Court division in the county that has proper venue for the trust. What: A petition/complaint asking the court to resolve the co-trustee deadlock (often framed as a request for instructions, appointment of a neutral fiduciary, or removal/replacement of a trustee). When: As soon as the deadlock is impairing administration or creating risk (for example, inability to renew leases, pay expenses, or respond to time-sensitive offers).
Next step: The court sets a schedule for service and responses. If the matter is contested, the case can move into motion practice and hearings; timing varies by county and complexity.
Final step: The court enters an order that may (a) direct how the trustees must proceed on the property decision, (b) authorize a specific action, or (c) change who serves as trustee so the trust can function.

Exceptions & Pitfalls

The trust may override the default rule: Some trusts allow either co-trustee to act independently, allow majority action, or assign one trustee final authority over real estate. The document controls if it clearly changes the default.
Delegation is limited: Co-trustees may be able to delegate certain administrative tasks (like bookkeeping, paying routine bills, hiring a property manager, or collecting rent) when the settlor would not have expected joint performance, but delegation usually does not solve a fundamental “sell vs. keep” deadlock.
Conflict-of-interest concerns: Decisions about keeping or selling can become high-risk if either trustee has a personal interest in the property or a side deal. Transactions involving close family relationships can be scrutinized, and beneficiaries may challenge actions that appear self-interested.
Communication failures can escalate the remedy: A persistent breakdown in cooperation or failure to keep beneficiaries reasonably informed can support court intervention, including removal, even without proof of bad faith if administration is impaired.
Mixing “estate administration” and “trust administration” steps: Opening an estate does not automatically resolve trust authority issues. The correct forum and procedure depend on whether the property is owned by the estate, the trust, or both (for example, through pour-over planning or incomplete funding).

For more on resolving property deadlocks between fiduciaries, see selling or dividing multiple trust-owned properties when co-trustees are in conflict and appointing a neutral third party to manage the trusts.

Conclusion

In North Carolina, when there are two co-trustees and the trust document does not say otherwise, major trust decisions typically require unanimity, so a disagreement about selling versus keeping trust-owned rental properties can create a deadlock. Co-trustees still must manage the rentals responsibly while the dispute continues, but a sale decision may not move forward without agreement or court involvement. The next step is to review the trust’s co-trustee provisions and, if deadlock persists, file a trust proceeding in the proper county to request court instructions or a change in trustees.

Talk to a Probate Attorney

If co-trustees are deadlocked over whether to sell or keep trust-owned rental properties, our firm has experienced attorneys who can help explain the governing trust terms, the North Carolina default rules, and the court options to break the impasse. 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.