How can I get the trustee of the co-owner’s trust to sign a satisfaction of deed of trust? – North Carolina

Short Answer

In North Carolina, the recorded lien can be cleared by a satisfaction signed and recorded by the secured creditor of record (here, the trust acting through its trustee) or by using the statutory affidavit-of-satisfaction process through your closing attorney. If the deed of trust is invalid or only encumbers your co-owner’s share, you can seek an order in the partition case to clear title or shift the lien to the sale proceeds. Use the Register of Deeds in the county where the land sits.

Understanding the Problem

You’re in a North Carolina partition action and the property is under contract to sell after upset bids, but a co-owner recorded a deed of trust after the partition started. The deed names a trust as beneficiary, so its trustee must sign a satisfaction to release the lien before closing. You want to know how to get that satisfaction so the sale can fund and close.

Apply the Law

Under North Carolina law, a recorded deed of trust is cleared by recording a satisfaction in the county Register of Deeds. A satisfaction may be signed by the secured creditor of record (the noteholder/beneficiary; here, the trust acting through its trustee) or, in certain cases, the deed of trust trustee or an authorized agent. If the secured debt has been paid or is otherwise not enforceable against the property, a settlement agent may record an affidavit of satisfaction after giving required statutory notices. In a partition sale, the court can determine lien status and direct that disputed liens be removed from the land or attached to sale proceeds. Contested issues in a special proceeding are transferred to Superior Court for resolution.

Key Requirements

• Identify the secured creditor of record: Confirm who holds/enforces the note; if the beneficiary is a trust, its trustee signs for the trust.
• Request a satisfaction in writing: Send a written notice to submit a satisfaction that includes the recording info for the deed of trust and your basis (payoff or legal reason why it no longer encumbers the land).
• Use the affidavit-of-satisfaction process if needed: A North Carolina closing attorney can record an affidavit of satisfaction after giving the statutory notice and waiting the required period.
• Raise lien validity in the partition case: If the deed of trust was recorded after the partition began or only encumbers a co-owner’s interest, ask the Clerk of Superior Court to address it; contested issues are transferred to Superior Court.
• Record in the right county: File any satisfaction or affidavit with the Register of Deeds where the property is located to clear title of record.

What the Statutes Say

• North Carolina Gen. Stat. § 45-36.10 (Satisfaction by secured creditor) – Allows the secured creditor or its agent to record a satisfaction releasing the deed of trust.
• North Carolina Gen. Stat. § 45-36.21 (Notice to submit satisfaction) – Sets a process to demand that the secured creditor submit a satisfaction and enables an affidavit of satisfaction after notice.
• North Carolina Gen. Stat. § 1-301.2 (Transfer to Superior Court) – Requires transfer of special proceedings when factual or equitable issues arise.
• North Carolina Gen. Stat. § 1-339.1 (Judicial sales) – Governs the judicial sale process (including upset bids) used in partition sales.

Analysis

Apply the Rule to the Facts: Because the deed of trust names a trust as beneficiary, its trustee is the secured creditor’s signer for a satisfaction. If the co-owner’s post-partition deed of trust is not enforceable against the entire property, you can ask the court in the partition case to remove it from the land or attach it only to that co-owner’s share of proceeds. To close now, your settlement agent can send a notice to submit satisfaction and, if no cooperation, proceed with an affidavit of satisfaction after the statutory waiting period.

Process & Timing

1. Who files: Settlement agent/closing attorney or owner. Where: Register of Deeds in the county where the property sits; motions in the partition file go to the Clerk of Superior Court. What: Written Notice to Submit Satisfaction; then a Satisfaction of Security Instrument or an Affidavit of Satisfaction (statutory form content); if contested, a motion in the partition proceeding to determine lien status. When: Send the notice promptly; wait the statutory notice period before an affidavit; raise court relief before confirmation/closing if the lien clouds title.
2. If the trustee signs, record the satisfaction; title updates typically post within days, but timing varies by county and register’s workload.
3. If no cooperation, your attorney records an affidavit of satisfaction (after notice period) or seeks a court order in the partition case directing that the deed of trust not encumber the property and authorizing the sale free and clear, with any valid lien to attach to proceeds.

Exceptions & Pitfalls

• Don’t confuse roles: the deed of trust’s “trustee” (named in the security instrument) is different from the trustee of the beneficiary trust. The signer depends on who is the secured creditor of record.
• Serve notices on the secured creditor of record at the address in the recorded instrument; wrong-party or wrong-address notice can delay or invalidate an affidavit of satisfaction.
• If the trust changed trustees, confirm the current trustee or authorized agent before demanding a satisfaction.
• Partition sales are judicial sales; if the lien’s validity is disputed, ask the clerk to transfer that issue to Superior Court so the judge can resolve it and direct the Register of Deeds accordingly.

Talk to a Partition Action Attorney

If you’re dealing with a last-minute lien that threatens your partition sale closing, 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.