Dec152025
Partition Action Q&A Series

Can a buyer close without title insurance, and what protections or contract terms could reduce the risk if they do? – North Carolina

Short Answer

Under North Carolina law, a buyer may close on real estate without purchasing title insurance, but doing so shifts most of the risk of hidden title defects, liens, and competing claims onto the buyer. In a partition or tax-foreclosure context, those risks can be higher because of prior delinquencies and litigation history. Contract terms such as stronger deed warranties, detailed seller representations, curative title work, escrows, and indemnities can reduce (but not eliminate) that risk if a buyer chooses to close without a policy.

Understanding the Problem

The core question is whether, in North Carolina, a buyer can choose to close on a property without title insurance, and if so, what contractual protections can help manage the risk. This often arises when a co-owned property comes out of a tax foreclosure or a partition dispute, and a prospective buyer or one of the co-owners wants to buy out the others or sell quickly to a third party. The concern is whether the buyer can rely on the deed and the court file alone, or whether additional contract terms are needed to address potential liens, prior owners, or unresolved claims, especially when a partition action and questions over credits for taxes, insurance, and improvements are already pending.

Apply the Law

North Carolina law does not require buyers to purchase title insurance. Instead, the law focuses on the type of deed delivered, the public land records, and doctrines such as marketable title and record notice. In a partition or tax-foreclosure setting, court orders, recorded notices, and the chain of title all play a key role in defining what the buyer actually receives. The Register of Deeds in the county where the property sits is the primary forum for recording deeds, court orders, and other documents that affect title, and deadlines for recording and filing notices can determine which interests survive against a buyer.

Key Requirements

  • Conveyance by proper deed: The seller or parties to a partition must use an appropriate deed (for example, general warranty, special warranty, or quitclaim) that validly conveys the interest they own and states any limitations or reservations.
  • Clear chain of title and recorded interests: Rights in real estate are generally governed by what is properly recorded in the public records over time, including deeds, tax-foreclosure orders, partition judgments, liens, easements, and restrictions, as shaped by North Carolina’s marketable title rules.
  • Disclosure and allocation of obligations: Contracts can and should spell out who is responsible for taxes, insurance, association dues, and curative work, and can require sellers to disclose known adverse matters of record, including pending orders that affect the property.

What the Statutes Say

Analysis

Apply the Rule to the Facts: In the described situation, a tax-foreclosure property is co-owned and subject to a pending North Carolina partition lawsuit over how to split proceeds and whether one co-owner receives credits for taxes, insurance, and improvements. A buyer could lawfully close without title insurance, but that buyer would rely on the foreclosure judgment, partition filings, and deed language to define the interest received. If the parties use a deed with limited or no warranties, and there are unresolved issues in the partition case or gaps in the tax-foreclosure process, the uninsured buyer bears most of the risk that a prior lienholder, co-owner, or other claimant disputes title later.

Process & Timing

  1. Who files: The seller, co-owners, or partition plaintiff typically arrange the conveyance. Where: The executed deed and any partition or foreclosure orders are recorded with the county Register of Deeds in North Carolina where the property is located. What: A properly drafted deed (often prepared by a North Carolina real estate attorney) that states the type of warranties, the legal description, and any reservations; the contract of sale should address title, risk allocation, and tax/insurance credits. When: Deeds should be recorded promptly after closing; priority of interests often depends on who records first.
  2. Next, the parties finalize the partition settlement or obtain a court order that approves the division of proceeds and confirms what interest is being conveyed. This step can take weeks or months, depending on court schedules and whether any party contests the settlement or sale.
  3. Finally, once the deed and any relevant court orders are recorded, the buyer holds record title. Without title insurance, the buyer must rely on the recorded documents and contractual rights (such as indemnities or representations) if a hidden defect later appears.

Exceptions & Pitfalls

  • Some liens, easements, and restrictions survive even long chains of title under the marketable title rules, so decades-old rights may still burden the property despite an apparently clean record.
  • Tax foreclosures and partition actions may not automatically clear all junior or co-owner interests, especially if notice or service was defective; an uninsured buyer may have to litigate those disputes at their own expense.
  • Common mistakes include relying solely on a quitclaim or special warranty deed without understanding what that leaves uncovered, failing to obtain a thorough title search by a North Carolina attorney, and omitting detailed seller representations, estoppel certificates, and indemnity provisions from the contract.
  • Failure to spell out which party pays delinquent taxes, association dues, or special assessments, and whether one co-owner receives reimbursement or credit at closing, can lead to later disputes or unexpected liens against the buyer’s interest.

Conclusion

In North Carolina, a buyer may lawfully close without title insurance, even on a tax-foreclosure or partition property, but doing so leaves that buyer exposed to title defects, surviving liens, and litigation risk. The controlling rule is that title quality flows from the deed, court orders, and recorded chain of title, not from any insurance requirement. To reduce risk, parties should negotiate clear deed warranties, detailed representations and disclosures, and written allocation of taxes, insurance, and curative work, and ensure the deed and court orders are promptly recorded with the Register of Deeds.

Talk to a Partition Action Attorney

If a property involved in a North Carolina partition or tax-foreclosure case may be sold without title insurance, our firm has experienced attorneys who can help clarify the risks, contract terms, and timing. 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 any specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If there is 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.