Short Answer

In North Carolina, county and city property taxes are a first lien on real estate and must be paid from the proceeds of a court-ordered partition sale before any co-owner receives money. To head off a tax foreclosure, promptly notify the tax collector about the pending partition sale and ask that collection be held because taxes will be paid at closing. If foreclosure has already started, you can stop it by paying the delinquent taxes, interest, and costs and then seek reimbursement from the sale proceeds at the distribution hearing.

Understanding the Problem

You’re a North Carolina co-owner in a court-ordered partition sale. The commissioner’s closing was rescheduled, and the tax department, unaware of the proceeding, threatened foreclosure, so you’ve been making payments. A final report is coming, and a hearing is set to allocate proceeds and approve commissioner and attorney fees. The home was vacant after a relative’s death, another relative squatted there, and you’re weighing cleanup and lock-change costs and whether to receive funds by check or wire.

Apply the Law

Under North Carolina law, ad valorem property taxes attach as a first-priority lien to the real property and are paid before other claims. In a partition sale, the commissioner follows the judicial sales procedure: reports the sale, allows the statutory upset-bid period, and the Clerk of Superior Court confirms the sale. At the distribution hearing, the clerk ensures payment of sale costs and liened obligations (including property taxes) from the proceeds before any distribution to co-owners. If a separate tax foreclosure is filed, it can typically be resolved by payment before the foreclosure sale is confirmed.

Key Requirements

• First‑lien taxes: County/city property taxes have first priority on the land and are paid from sale proceeds before owner distributions.
• Judicial sale process: Partition sales use the judicial sale framework; a report of sale is filed and an upset‑bid window runs before confirmation.
• Clerk oversight: The Clerk of Superior Court confirms the sale and approves payment of taxes, sale expenses, the commissioner’s fee, and reasonable attorney fees before distributions.
• Stopping foreclosure: If a tax foreclosure has begun, paying the delinquent taxes, accrued interest, and costs before confirmation of the foreclosure sale will halt it.
• Preservation costs: Necessary costs to secure, clean, or preserve the property (e.g., lock changes, debris removal for a vacant/squatted home) may be allowed as sale expenses from proceeds with documentation.

What the Statutes Say

• N.C. Gen. Stat. § 105-355 (Lien of property taxes) – Local property taxes are a first lien on the real estate.
• N.C. Gen. Stat. § 105-374 (Tax foreclosure by civil action) – Allows foreclosure for unpaid taxes; payment before sale confirmation generally stops the case.
• N.C. Gen. Stat. § 1-339.36 (Upset bids in judicial sales) – Sets the 10‑day upset‑bid period after a report of sale.

Analysis

Apply the Rule to the Facts: Because property taxes are a first lien, the commissioner’s sale proceeds must satisfy all delinquent taxes, interest, and any tax-foreclosure costs before co-owners receive funds. The tax office’s foreclosure threat arose because it was unaware of the partition case; providing the file number and order of sale, plus a timeline to closing, supports a hold on enforcement. Your lock-change and cleanup outlays relate to preserving a vacant, squatted property; with invoices, they can be presented as necessary sale expenses for approval at the distribution hearing. Regarding disbursement, many commissioners and clerks disburse by check; wires may be available if requested and fees are covered.

Process & Timing

1. Who files: The commissioner or a party. Where: Clerk of Superior Court (Special Proceedings) in the county where the property sits. What: A motion (with proposed order) to authorize immediate payment of delinquent property taxes from sale proceeds (or bidder deposit/escrow) and to recognize documented preservation expenses; serve the tax collector with notice. When: Before any scheduled tax-foreclosure sale date and before the partition sale is confirmed.
2. If a tax foreclosure under § 105‑374/§ 105‑375 is pending, file a notice or motion in that case asking for a continuance or brief stay based on the imminent partition sale, and be prepared to tender the payoff to redeem before confirmation. Counties may vary in scheduling and hold policies.
3. After the upset‑bid period closes, the clerk holds the distribution hearing, approves the commissioner’s final report, and orders payment of taxes, sale expenses (including commissioner and reasonable attorney fees), then distributes net proceeds to co-owners by their interests.

Exceptions & Pitfalls

• Multiple‑year delinquencies or special assessments may increase the payoff; confirm a written payoff with the tax office.
• Silence can trigger enforcement—notify the tax collector in writing about the pending partition sale and provide the court order and timeline.
• Preservation costs (lock changes, cleanup) require documentation; submit invoices so they can be allowed as sale expenses.
• Funds transfer risks—if requesting a wire, use verified instructions; many clerks and commissioners prefer checks.

Talk to a Partition Action Attorney

If you’re dealing with a threatened tax foreclosure during a partition sale, 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.