Can my attorney’s fees for defending the partition be paid out of the sale proceeds? – North Carolina

Short Answer

In North Carolina partition cases, the Clerk of Superior Court may order reasonable attorney’s fees to be taxed as “costs” and paid from the sale proceeds, but only for work that provided a common benefit to all co-owners (for example, getting the property properly before the court or through sale). Fees for purely adversarial strategies (like trying to delay the case) are usually not paid from the proceeds and remain your own expense.

Understanding the Problem

You want to know whether the court can pay your attorney’s fees from the property’s sale proceeds in a North Carolina partition action. The key decision point is whether your lawyer’s work benefited all co-owners or was primarily adversarial. Here, the former co-owner filed a partition without naming the mortgage lender, you moved out last year, and the former co-owner now lives there. You are also considering a buy-out by assuming the mortgage.

Apply the Law

Under North Carolina law, partition actions are special proceedings managed by the Clerk of Superior Court. The clerk has discretion to tax costs of the proceeding, and in partition matters that can include attorney’s fees, but only to the extent the services benefited the common interest of all co-owners (the “common benefit” rule). Typical examples are necessary steps that help everyone: joining required parties (like a mortgage lender), clearing title issues, facilitating an orderly sale, and ensuring proper accounting. Work that is primarily partisan—such as litigating side disputes between the co-owners, attempting to delay the sale, or pursuing claims that benefit only one side—is ordinarily not shifted to the sale proceeds.

Key Requirements

• Common benefit: Only fees for work that materially advanced the partition or sale for all co-owners can be taxed as costs and paid from proceeds.
• Reasonableness: You must show time spent, tasks performed, rates charged, and why the work was necessary and efficient.
• Proper forum and timing: Request fees by motion in the partition file before proceeds are distributed; the Clerk of Superior Court may set a hearing.
• Distribution order: From sale proceeds, the court typically pays allowed costs of sale first (including any approved common-benefit fees), then lienholders, then net funds are distributed to co-owners.
• Necessary parties: Lienholders (like the mortgage lender) should be joined; failing to include them can complicate the sale and payment of costs.

What the Statutes Say

• North Carolina Gen. Stat. Chapter 46A (Partition) – Governs partition by sale or in kind, parties, and handling of proceeds and costs.
• North Carolina Gen. Stat. § 1-339.1 (Judicial sales procedures) – Sets procedures for public and private sales, confirmation, and disbursements.
• North Carolina Gen. Stat. § 6-21 (Taxation of costs) – Allows courts to tax costs in special proceedings; attorney’s fees are allowed only where a statute authorizes them.

Analysis

Apply the Rule to the Facts: Fees for joining the mortgage lender, clarifying title, and moving the case toward a clean sale likely qualify as common-benefit work and can be considered for payment from proceeds. By contrast, fees spent on delaying tactics or purely one-sided strategy usually are not taxed as costs. If you pursue a buy-out by assuming the mortgage, negotiation time that avoids a sale and resolves the case may be partly viewed as beneficial, but litigation over leverage or delay would not be.

Process & Timing

1. Who files: A co-owner (through counsel). Where: Clerk of Superior Court in the county where the property is located. What: Motion to tax attorney’s fees as costs with an affidavit detailing time, rates, tasks, and why the work benefited all co-owners. When: Typically after order of sale and at or before confirmation, and always before final disbursement of proceeds.
2. The clerk may calendar a hearing, review invoices and declarations, and apportion any allowed fees among the parties as costs of the proceeding. Timing can vary by county and docket.
3. If granted, the order directs the commissioner/trustee or clerk handling funds to pay the approved amount from sale proceeds before distribution to co-owners.

Exceptions & Pitfalls

• Common-benefit limit: Fees for adversarial issues (e.g., attempts to delay or gain individual advantage) are typically not shifted to the sale proceeds.
• Join the lender: If the mortgagee is not a party, the sale may proceed subject to the lien, complicating disbursements and potentially delaying any fee award.
• Proof problems: Unsupported or block-billed time, excessive rates, or work that was not necessary can lead to reductions or denial.
• Side claims: Claims for occupancy credits, rents, or contribution are often treated separately; related fees are less likely to be taxed as common costs.
• Heirs’ property rules: Special buy-out and procedure rules may apply if the property qualifies as heirs’ property; procedures and fee outcomes may differ.

Talk to a Partition Action Attorney

If you’re facing a partition and want to know which of your legal fees can be paid from the sale proceeds, our firm has experienced attorneys who can help you understand your options and timelines. 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.