Jan92026
Partition Action Q&A Series

Can my co-owner deduct past mortgage payments, utilities, and upkeep from my share if I moved out and they paid everything? – North Carolina

Short Answer

In North Carolina, a co-owner can often seek a credit (sometimes called “contribution” or an “accounting adjustment”) for certain property “carrying costs” they paid, such as mortgage payments, property taxes, insurance, and necessary repairs—especially in a partition case or when negotiating a buyout.

However, not every expense is treated the same. Utilities and day-to-day living costs are commonly disputed, and credits can be reduced or offset depending on who had exclusive use of the home and what the payments actually covered.

Understanding the Problem

Under North Carolina partition and co-ownership rules, can one co-owner reduce the other co-owner’s share of equity in a buyout or sale because the paying co-owner covered the mortgage, utilities, and upkeep after the other co-owner moved out? The key decision point is whether the amounts paid qualify as reimbursable property-level costs (as opposed to personal living expenses) and whether any offsets apply based on possession and use of the property.

Apply the Law

North Carolina law allows a cotenant (co-owner) to seek contribution for certain “carrying costs” paid to preserve the property and protect both owners’ interests. In a partition case (filed with the Clerk of Superior Court in the county where the property is located), the court can adjust each co-owner’s share to account for those payments. The most common reimbursable categories are payments tied to ownership of the real estate itself, not day-to-day household consumption.

Two practical themes usually control the outcome: (1) whether the payment was necessary to preserve the property or prevent default/loss, and (2) whether the paying co-owner had exclusive possession, which can affect reimbursement for certain items.

Key Requirements

  • The expense must qualify as a reimbursable “carrying cost” or similar ownership cost: Mortgage payments (including payments on a loan used to acquire the property), property taxes, homeowner’s insurance, and repairs are commonly treated as property-level costs rather than personal expenses.
  • The paying co-owner must prove what was paid and when: Courts and negotiators typically look for loan statements, tax bills, insurance declarations, receipts, and proof of payment. Vague estimates usually do not carry much weight.
  • Offsets and limits may apply: Exclusive possession can limit reimbursement for certain categories (for example, some interest/repair reimbursement issues can turn on whether the paying co-owner had exclusive possession). Property tax contribution in a partition case is also time-limited by statute.

What the Statutes Say

Analysis

Apply the Rule to the Facts: Here, one co-owner moved out while the other co-owner continued paying the ongoing bills. Under North Carolina partition rules, the paying co-owner has a strong argument for credit for documented “carrying costs” that preserve the property (commonly mortgage payments, property taxes, insurance, and necessary repairs). Utilities are more likely to be treated as personal consumption tied to occupancy, so they are often harder to justify as a deduction from the other co-owner’s equity unless the parties’ agreement clearly makes them shared expenses.

Process & Timing

  1. Who files: Any cotenant. Where: The Clerk of Superior Court in the North Carolina county where the property is located. What: A partition petition (and, if seeking credits, an application/request in the partition case for contribution/accounting adjustments). When: Contribution requests must be raised within the partition proceeding timelines; property tax contribution in partition is limited to taxes paid in the 10 years before the partition petition is filed (plus interest at the legal rate).
  2. Accounting issues get identified and supported: The paying co-owner typically gathers proof of payments (mortgage statements showing principal/interest/escrow, tax receipts, insurance invoices, repair receipts). The other co-owner may challenge whether an item was necessary, whether it benefited both owners, or whether an offset should apply based on exclusive possession.
  3. Adjustment at buyout/sale or by court order: In a negotiated buyout, the parties can mirror the same concepts by agreement (for example, crediting verified carrying costs but excluding utilities). In a partition, the court can adjust shares or sale proceeds to reflect allowed contribution and related equitable adjustments.

Exceptions & Pitfalls

  • Utilities are not the same as “carrying costs”: Electricity, water, internet, and similar bills often look like occupancy expenses rather than costs that preserve title or prevent foreclosure. They may be negotiable, but they are commonly disputed in court.
  • Exclusive possession can change reimbursement: North Carolina statutes place limits on certain reimbursement claims when the paying co-owner had exclusive possession of the property during the period the costs were incurred. That issue can become a major bargaining point in buyout negotiations.
  • Mortgage payments are not one number: A monthly payment may include principal, interest, escrowed taxes, escrowed insurance, and sometimes PMI. Parties often disagree about what portion should be credited and how to document it.
  • “Upkeep” needs labels: Necessary repairs (to preserve value) are treated differently than upgrades or remodeling. Improvements may be credited only up to the lesser of cost or value added, and proof matters.
  • Buyout math vs. sale math: Realtor commissions and closing costs usually apply to a third-party sale, not necessarily to an off-market buyout—unless the written buyout agreement builds them in. A clear written agreement and a properly prepared deed are critical to avoid future disputes.

For more background on how credits and equity adjustments are handled in this context, see credit for mortgage payments, taxes, and other expenses in a North Carolina partition sale.

Conclusion

In North Carolina, a co-owner can often seek to deduct (credit) certain documented property “carrying costs” from the other co-owner’s share in a partition case or buyout negotiation, especially mortgage payments, property taxes, insurance, and necessary repairs. Utilities and general household bills are more likely to be treated as occupancy expenses and may not be credited the same way. The most important next step is to gather proof of each payment category and, if a partition filing is on the table, raise contribution issues early—keeping in mind the 10-year limit on property tax contribution in a partition case.

Talk to a Partition Action Attorney

If you’re dealing with a co-owner buyout or dispute over credits for mortgage payments and other property expenses, our firm has experienced attorneys who can help explain the rules, evaluate documentation, and map out 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.

Category: Partition Action 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.