Short Answer

In North Carolina partition cases, a fair buyout is your co-owner’s percentage of the home’s verified net equity: fair market value minus liens/payoffs and typical sale costs, then adjusted for agreed credits (taxes, mortgage, insurance, improvements) and charges (occupancy/waste). If numbers are missing, insist on a joint appraisal and written payoff statements, or build holdbacks and “fallback to sale” terms into the mediation agreement.

Understanding the Problem

You’re in a North Carolina partition mediation and want to decide whether to sell the home or buy out your co-owner. You need to know: can you propose a fair buyout now, and how do you protect yourself if one co-owner won’t share the mortgage payoff or equity loan details?

Apply the Law

Under North Carolina law, partition is handled as a special proceeding before the Clerk of Superior Court. Property may be divided in kind or sold, with sale proceeds distributed after paying liens and costs. In mediation, the practical formula for a buyout is based on net equity, and the clerk may approve settlements and allocate mediation costs. If the property is “heirs property,” statutes provide an appraisal-and-buyout process with short, statute-set election and payment windows.

Key Requirements

• Verified value: Get an independent appraisal (or two broker opinions with a tie-breaker). Use that number, not estimates.
• Verified liens/payoffs: Require current payoff letters for the mortgage and any HELOC or equity loans to calculate true net equity.
• Sale-cost baseline: Deduct ordinary sale costs (e.g., broker’s commission, excise tax/stamps, and customary closing fees) to compare buyout vs. sale.
• Credits and charges: Adjust for contributions (taxes, mortgage, insurance, necessary repairs) and for occupancy/rent or waste, as applicable.
• Funding and timing: Condition any buyout on proof of funds/loan approval, target closing date, and an automatic fallback to list the property if funding fails.

What the Statutes Say

• North Carolina Partition Statutes (Chapter 46A) – Governs partition in kind or by sale and procedures for heirs property, including appraisal and buyout elections.
• G.S. 7A-38.3B (Mediation before the Clerk) – Clerk may order mediation and apportion mediator fees and related costs.
• Article 29A, Chapter 1 (Judicial Sales) – Procedures for court-ordered sales and distribution after costs and liens.

Analysis

Apply the Rule to the Facts: Because a co-owner has not produced payoff figures, treat any buyout as provisional. Propose a joint appraisal to set fair market value, require written payoff letters for all liens, and calculate net equity after typical sale costs. Apply contribution credits and occupancy charges, then multiply by ownership shares to frame a fair buyout. If disclosures or funding don’t materialize, the mediated agreement should default to listing the property for sale.

Process & Timing

1. Who files: Any co-tenant. Where: Clerk of Superior Court in the North Carolina county where the property sits. What: Verified petition for partition (special proceeding); the court may order mediation. When: At any time; if the property qualifies as heirs property, the court will set short statutory deadlines for appraisal objections, buyout elections, and payment.
2. The clerk may appoint commissioners, order an appraisal, or, if sale is necessary, proceed under judicial sale procedures. Mediation often occurs early; the clerk can require attendance and timely payment of mediator fees and can apportion those fees.
3. If parties settle on a buyout: execute a written mediated settlement agreement that includes appraisal, payoff letters, funding proof, closing date, and a fallback to list the property. If no settlement: proceed to partition in kind or sale, then distribute net proceeds after liens, costs, and accounting adjustments.

Exceptions & Pitfalls

• Heirs property rules: Special appraisal and buyout procedures apply; failure to elect or pay on time can forfeit the buyout path.
• Improvements vs. repairs: Necessary repairs and carrying costs are commonly credited; improvements are usually credited only to the extent they increase value.
• Occupancy and waste: A sole occupant may face a charge for rental value; intentional damage or waste can reduce that owner’s share.
• Missing payoffs: Do not rely on estimates. Require written payoff letters; if unavailable, use escrow holdbacks at closing.
• Mediation costs: Courts can apportion mediator fees and may allow payment from sale proceeds; pay timely to avoid enforcement issues.

Talk to a Partition Action Attorney

If you’re dealing with an uncertain mortgage balance or equity in a North Carolina partition mediation, 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.