Jan72026
Partition Action Q&A Series

If the property is sold through partition, how is the equity divided and can I get credit for mortgage payments, taxes, and other expenses I paid? – North Carolina

Short Answer

In a North Carolina partition sale, the starting point is that net sale proceeds (the “equity” after paying sale costs and liens) are divided based on each co-owner’s ownership interest shown by the deed. However, North Carolina law also allows a co-owner to ask the court for contribution/credits for certain payments that preserved the property’s value—such as mortgage payments to acquire the property, property taxes, insurance, and qualifying repairs—and those credits can adjust what each person receives from the sale.

Understanding the Problem

In North Carolina, when co-owners cannot agree on what to do with a jointly owned home, one co-owner can file a partition case asking the court to divide the property or order a sale and divide the proceeds. The practical question is how the court divides the equity after a partition sale when one co-owner claims they paid the mortgage and household expenses while the other co-owner remained on the deed. The single decision point is whether the paying co-owner can obtain court-ordered credits that change the final split of the net sale proceeds.

Apply the Law

In a partition sale, the court generally divides the net proceeds according to each cotenant’s ownership share (for example, 50/50 if the deed shows equal interests). North Carolina law also permits the court to make equitable adjustments—often called contribution or credits—when one cotenant paid certain “carrying costs” or made qualifying improvements that preserved or increased the property’s value. These adjustments are typically handled inside the partition case so the final distribution reflects both ownership percentages and approved credits.

Key Requirements

  • Ownership interest sets the baseline: The deed (and any later recorded instruments) usually controls each person’s percentage share for dividing net proceeds.
  • Qualifying payments must fit recognized categories: North Carolina allows contribution for “carrying costs” (including property taxes, homeowner’s insurance, repairs, and payments for a loan used to acquire the property) and, in limited form, for improvements.
  • Proper request and proof during the case: The cotenant seeking credits must apply in the partition proceeding and be prepared to document payments and show they fall within the statute’s definitions and limits.

What the Statutes Say

Analysis

Apply the Rule to the Facts: Here, the home is co-owned with a former partner, and one co-owner reports paying the mortgage and household bills while the other co-owner remained on the deed and filed for partition. In a sale, the baseline split follows the deed, but North Carolina law allows the paying co-owner to ask the court for contribution for qualifying “carrying costs,” which can include mortgage payments on the acquisition loan, property taxes, insurance, and repairs. If the paying co-owner can document those payments and show they fit the statutory categories (and any limits), the court can adjust the distribution of net sale proceeds so the final numbers are not a simple deed-percentage split.

Process & Timing

  1. Who files: Any cotenant. Where: North Carolina Superior Court (the partition case is filed in the county where the property is located). What: A partition petition/complaint and related filings; the court may appoint commissioners or proceed under the partition sale process. When: A cotenant seeking contribution for carrying costs or improvements should apply during the partition proceeding; for a partition sale, the statute allows the request to be made at any time during the case.
  2. Request credits (contribution/accounting): The cotenant seeking credits typically files a motion/application in the case and supports it with proof (loan statements, canceled checks, tax receipts, insurance declarations, repair invoices, and a clear timeline of payments).
  3. Sale and distribution: After the sale closes, the court-approved costs and liens are paid, then the remaining net proceeds are distributed according to ownership shares as adjusted by any court-ordered contribution/credits.

Exceptions & Pitfalls

  • “Household bills” are not always “carrying costs”: Utilities, internet, and similar living expenses may not qualify as statutory carrying costs, even if they were paid to keep the household running. Credits are more commonly tied to preserving the property and the co-owners’ interests (taxes, insurance, qualifying repairs, and acquisition-loan payments).
  • Exclusive possession can change reimbursement: Some reimbursement rules can be limited when the paying cotenant had exclusive possession for certain periods, particularly for interest on an encumbrance and some repair scenarios. The facts about who lived there, when, and whether the other cotenant was excluded can matter.
  • Improvements are treated differently than repairs: North Carolina generally limits improvement claims in partition to the lesser of the cost or the value added as of the date the partition case began, which often requires evidence beyond receipts (and not every upgrade is treated as value-adding).
  • Documentation problems: Cash payments, missing statements, or payments made from mixed accounts can make it harder to prove amounts and dates. Clear records tied to the property address and loan/tax accounts usually matter.
  • Timing and pleading issues: Waiting too long to raise contribution issues can create avoidable disputes. The safer approach is to raise credits early in the case and keep the request tightly tied to the statutory categories.

Conclusion

In a North Carolina partition sale, equity is generally divided based on each co-owner’s deeded ownership share, but the court can adjust the split when one co-owner proves qualifying contributions such as mortgage payments on the acquisition loan, property taxes, insurance, and certain repairs, and limited claims for improvements. A key limit is that contribution for property taxes under the partition statute generally reaches only taxes paid in the 10 years before the case was filed. The next step is to file a contribution request in the partition case with supporting records of each payment.

Talk to a Partition Action Attorney

If a former partner filed a North Carolina partition case and one co-owner has been paying the mortgage, taxes, insurance, or repairs, credits may affect the final split of sale proceeds. Our firm has experienced attorneys who can help evaluate which payments may qualify, how to document them, and when to raise them in the case. 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.