Jan282026
Partition Action Q&A Series

What happens if my co-owner is behind on the mortgage and property taxes but my name is still on the loan and deed? – North Carolina

Short Answer

In North Carolina, if a co-owner falls behind on the mortgage or property taxes and a name remains on the loan and deed, the lender and the county can still pursue remedies that affect the entire property and both owners. A missed mortgage can lead to foreclosure, and delinquent property taxes can become a lien that must be paid (often out of sale proceeds) and can also lead to a tax foreclosure process. When a co-owner refuses to refinance or cooperate, a partition action in Superior Court is often the legal tool used to force a sale or division and address who should be credited or charged for mortgage payments, taxes, and other carrying costs.

Understanding the Problem

In North Carolina, what happens when one co-owner stays in the home and stops paying the mortgage and property taxes, but the other co-owner remains on both the deed (ownership) and the loan (personal obligation)? The decision point is whether the non-occupying co-owner can be financially and legally exposed to foreclosure, tax liens, and credit damage even though that co-owner is not living in the property. This question commonly comes up after a breakup when one person refuses to refinance, refuses to sell, and refuses to let the other co-owner take over the property.

Apply the Law

Under North Carolina law, being on the deed generally means having an ownership interest, and being on the promissory note generally means personal responsibility to the lender for the debt. If payments are missed, the lender’s remedy is against the collateral (the home) through foreclosure, and the lender may also pursue the borrowers personally depending on the type of loan and the facts. Separately, unpaid property taxes become a lien that attaches to the real estate and can be enforced; those taxes typically must be satisfied before sale proceeds are distributed in many court-ordered sales. When co-owners cannot agree on what to do with the property, a partition proceeding in Superior Court can be used to end the co-ownership and, in appropriate cases, force a sale and then allocate proceeds after paying liens and approved costs.

Key Requirements

  • Loan liability (note): If a name is on the mortgage loan, the lender can treat that person as responsible for timely payments even if another co-owner promised to pay.
  • Title exposure (deed): If a name is on the deed, the ownership interest can be affected by foreclosure or tax enforcement because those processes act against the property itself.
  • Partition remedy: If co-owners cannot agree on refinance, buyout, or sale, a partition case can ask the court to order a method of partition (often a sale for a single-family home) and then address how proceeds should be distributed after liens and allowable charges/credits are handled.

What the Statutes Say

Analysis

Apply the Rule to the Facts: Here, the former partner remains in the home and refuses to refinance or allow a clean transfer, while the other co-owner remains on both the deed and the loan. If the mortgage goes unpaid, the lender can report delinquency and pursue foreclosure against the property, which threatens both owners’ equity and can affect the credit of anyone on the loan. If property taxes go unpaid, the county’s tax lien continues until paid and can be enforced, which can also threaten the property and reduce any eventual equity available to divide.

In a partition case, the court’s goal is not to “punish” the nonpaying co-owner; it is to end the forced co-ownership and distribute the net proceeds after paying liens and approved costs. In many cases, the accounting becomes important: who paid the mortgage, taxes, insurance, necessary repairs, or other carrying costs, and whether the occupying co-owner should bear more of those costs because that person had the benefit of exclusive use. For more detail on how credits and charges can work in a sale scenario, see credit for mortgage payments, taxes, and other expenses.

Process & Timing

  1. Who files: A co-owner who wants to end the co-ownership. Where: North Carolina Superior Court in the county where the property is located (filed with the Clerk of Superior Court as a special proceeding). What: A partition petition requesting the court select a method of partition (often a sale for a single-family residence) and requesting an accounting for carrying costs and liens. When: As soon as the co-owners reach an impasse and there is risk of missed payments, tax enforcement, or ongoing financial exposure.
  2. Early case steps: The other co-owner must be served, and the court will address ownership interests and the appropriate method of partition. If a sale is requested, the party seeking sale generally must show why an actual division would cause substantial injury under the partition statutes.
  3. Sale and distribution: If the court orders a partition sale, sale proceeds typically go first to costs and liens that must be paid (including delinquent property taxes that are liens), and then the court distributes the remaining proceeds after resolving credits/charges between co-owners.

Exceptions & Pitfalls

  • Credit and collection risk can exist even without possession: If a name is on the loan, late payments can be reported and collection efforts can target that borrower, even if the other co-owner caused the default.
  • Tax liens do not disappear: Delinquent property taxes generally remain a lien until paid, and they can reduce or consume equity at sale. Waiting can turn a manageable arrearage into a larger payoff with added interest and costs.
  • Refinance stalemates are common: A co-owner cannot usually be forced to refinance simply because it would be fair; a partition action is often the practical way to force a sale or otherwise end the co-ownership when voluntary cooperation fails. Related discussion appears in resolve a partition or mediation first.
  • Documentation problems: Claims for credits (mortgage, taxes, insurance, necessary repairs) usually rise or fall on proof. Missing statements, unclear payment trails, or cash payments without records can weaken the accounting request.
  • Occupancy and “fairness” issues: When one co-owner lives in the home, courts often scrutinize who benefited from exclusive use versus who paid carrying costs. Failing to raise these issues early can complicate settlement and distribution later.

Conclusion

In North Carolina, if a co-owner falls behind on the mortgage and property taxes while another person remains on the loan and deed, both the property and the borrowers can be exposed to foreclosure, tax liens, and reduced equity. A partition action in Superior Court can end the co-ownership and, if appropriate, force a sale and then distribute proceeds after liens (including delinquent taxes) and approved credits/charges are addressed. The most important next step is to file a partition petition in the county where the property sits as soon as the refinance/sale impasse becomes clear.

Talk to a Partition Action Attorney

If a former partner is living in a jointly owned home, refusing to refinance, and falling behind on the mortgage or property taxes, a partition case may be the fastest path to protect equity and set a court-supervised timeline. Our firm has experienced attorneys who can help explain options and deadlines. 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.