Can I sue an executor for breaching fiduciary duties if they sell estate property improperly? – North Carolina

Short Answer

Yes—under North Carolina law, an executor (personal representative) can be held responsible for a breach of fiduciary duty tied to an improper sale of estate property, but the right remedy is often a probate-court (Clerk of Superior Court) proceeding rather than a simple civil lawsuit. Common remedies include stopping or unwinding an unauthorized sale, forcing an accounting, surcharging the executor for losses, and removing the executor. The key issue is whether the person who listed the property had legal authority to sell it and whether required court procedures for an estate sale were followed.

Understanding the Problem

In North Carolina probate, the decision point is whether the person who listed and tried to close on the house had the legal authority to sell estate real estate. Can an executor sell a house left to beneficiaries without proper authority, and what happens if a sale is started or completed without following the required probate process? The answer depends on the person’s role (executor versus beneficiary), what the will authorizes, and whether the Clerk of Superior Court approved the sale when approval is required.

Apply the Law

North Carolina treats an executor as a fiduciary. That means the executor must act in good faith, use reasonable care, and administer the estate for the benefit of the people entitled to receive estate property—not for personal advantage. If the executor uses estate property improperly (including mishandling a sale), North Carolina law allows “interested persons” (such as beneficiaries) to ask the Clerk of Superior Court for relief, which can include requiring an accounting, imposing personal liability for losses (often called a surcharge), and revoking the executor’s authority (removal).

Separately, selling estate real property often requires a court-supervised process when the sale is to create assets to pay debts and claims. In that situation, the sale typically proceeds through a special proceeding before the Clerk of Superior Court, and the sale process follows North Carolina’s judicial sale statutes. When a private sale is authorized, there are reporting requirements and an upset-bid period that can affect whether a closing can happen on the planned date.

Key Requirements

Fiduciary duty and improper conduct: The executor must act in good faith and with the care of a reasonably prudent person handling their own property. If the executor’s conduct is improper and causes loss, the executor can be held liable to interested persons for the resulting damage.
Authority to sell real property: A beneficiary generally cannot sell estate real estate just because the will leaves them an interest. If an executor sells, the executor must have authority under the will or authority granted through the proper probate process (often involving the Clerk of Superior Court).
Required court procedure for estate sales (when applicable): When the estate must sell land through a court proceeding (commonly to create assets), the sale must follow the judicial sale procedures, including required filings and reports. A private sale has specific reporting steps and may be subject to an upset-bid period.

What the Statutes Say

N.C. Gen. Stat. § 28A-13-10(c) (Breach of duty; liability) – Makes a personal representative liable for losses from misconduct, self-dealing, lack of good faith, or failure to use reasonable care, and treats improper exercise of estate powers as a fiduciary breach.
N.C. Gen. Stat. § 28A-9-1 (Revocation of letters after hearing) – Allows revocation (removal) of a personal representative for violating fiduciary duties, misconduct, or conflicts that hinder proper administration.
N.C. Gen. Stat. § 1-339.35 (Private sale; report of sale) – Requires a report of a private sale to be filed with the clerk within five days after the sale, with specific information about the transaction.

Analysis

Apply the Rule to the Facts: The will leaves the house to two beneficiaries, but one beneficiary listed the property and scheduled a closing without the other beneficiary’s permission. If the person pushing the sale is only a beneficiary (and not the court-appointed executor with authority to sell), that is a major red flag because a beneficiary typically cannot unilaterally sell estate real estate. If the person is the executor, the next questions become whether the will or the Clerk of Superior Court authorized the sale and whether the executor followed the required sale procedure; if not, the executor may face removal and personal liability for any loss caused by the improper sale process.

Process & Timing

Who files: An interested person (often a beneficiary) or the executor (depending on the relief sought). Where: The Clerk of Superior Court in the county where the estate is being administered. What: Common filings include a petition/motion to revoke the executor’s letters (remove the executor), a request to compel an accounting, and (if a sale is being pursued through the estate) a special proceeding/petition for authority to sell real property. When: As soon as an unauthorized listing, contract, or closing is discovered—waiting can make it harder to stop a closing or limit damage.
Immediate protection step: If a closing is imminent, counsel often seeks emergency relief through the Clerk/Superior Court process to prevent transfer while the authority to sell is reviewed. Timing can be tight, and local practice can vary by county.
After the authority question is resolved: If the executor lacked authority or failed to follow required sale procedures, the Clerk can order corrective steps (including a proper sale process), require a detailed accounting, and address liability. If the executor is removed, the former executor must turn over estate assets and proceed toward a final accounting under the court’s direction.

Exceptions & Pitfalls

Mixing up roles: A beneficiary acting alone is different from a court-appointed executor acting under authority. The first step is confirming who is actually appointed as personal representative and what authority the will grants.
Assuming “permission” is the legal test: Beneficiary consent can matter practically, but the legal question is authority (will authority or court authority) and compliance with required probate sale procedures.
Waiting until after closing: Once a deed is recorded to a third-party buyer, unwinding a transfer can become more complicated. Fast action is often critical when a closing is scheduled.
Focusing only on removal: Removal may stop future harm, but it does not automatically fix past damage. Separate relief may be needed, such as a surcharge for losses, an order requiring return of funds, or an accounting to trace sale proceeds.
Not using the probate forum: Many executor-misconduct disputes are handled through proceedings before the Clerk of Superior Court in the estate file (or related special proceedings), not as a stand-alone civil lawsuit.

Conclusion

Yes. In North Carolina, an executor can be held responsible for breaching fiduciary duties if estate property is sold without proper authority or without following required probate sale procedures. The usual path is to seek relief through the Clerk of Superior Court in the estate administration, which can include removal, an accounting, and personal liability for losses. The most important next step is to file the appropriate petition with the Clerk of Superior Court promptly—especially if a closing date is approaching.

Talk to a Probate Attorney

If there is a dispute about an executor’s authority to sell a house or concerns that an estate sale is being pushed through improperly, our firm has experienced attorneys who can help explain options and timelines in North Carolina probate. 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.