Jan22026
Partition Action Q&A Series

What is the process to get my share of past rental income and credits for carrying costs when the property is sold? – North Carolina

Short Answer

In North Carolina, a co-owner can ask the court handling the partition case to account for money tied to the property before sale proceeds get split. That usually includes (1) an accounting for rents collected for the benefit of all co-owners and (2) credits (contribution) for certain carrying costs paid to preserve the property, such as taxes, insurance, repairs, and certain loan payments. The request is made by filing an application/motion in the partition proceeding and supporting it with records so the court can adjust the final distribution at closing.

Understanding the Problem

In a North Carolina partition action, a co-tenant can ask: can the court adjust the final sale proceeds so each co-tenant receives the correct share after considering rental income collected during co-ownership and the carrying costs paid to keep the property going? The decision point is whether the partition court will make those adjustments inside the partition case so the net proceeds paid out at the end reflect both (a) rents and other property income that should have been shared and (b) eligible expenses one co-tenant paid that benefited all co-tenants.

Apply the Law

North Carolina partition cases are governed by Chapter 46A. The partition court can order an actual partition, a partition sale, a mix of both, or (if everyone does not object) allow some property to remain in co-tenancy. When a sale happens, the court can also address financial adjustments between co-tenants during the proceeding, including contribution for qualifying carrying costs and certain improvement claims. These adjustments typically get reflected in how the clerk/court directs the sale proceeds to be distributed.

Key Requirements

  • Raise the issue in the partition case: A co-tenant generally must assert claims for credits/contribution during the partition proceeding so the court can address them before proceeds are distributed.
  • Show the numbers with proof: The court will expect documentation (leases, rent ledgers, bank records, tax bills, insurance invoices, repair receipts, mortgage statements) and a clear calculation tied to each co-tenant’s ownership share.
  • Fit the claim into recognized categories: North Carolina expressly recognizes contribution for “carrying costs” and limits some items (notably property taxes) by a lookback period; other disputes (like title/share disputes) may be handled without stopping the sale and resolved later.

What the Statutes Say

Analysis

Apply the Rule to the Facts: The facts describe co-tenants who inherited two properties, with one producing rent that has been collected but not shared. In a North Carolina partition sale, the partition court can address financial adjustments between co-tenants so the final payout reflects the correct split. If one co-tenant has paid carrying costs (like taxes, insurance, repairs, or qualifying loan payments) to preserve the property, that co-tenant can seek contribution credits during the partition proceeding, and property tax contribution is limited to taxes paid in the 10 years before the partition petition (plus interest at the legal rate).

Process & Timing

  1. Who files: The co-tenant seeking the adjustment. Where: In the existing partition case (typically before the Clerk of Superior Court in the county where each property is located). What: An application/motion in the partition proceeding requesting (a) an accounting of rents and (b) contribution/credits for carrying costs under Chapter 46A, supported by an affidavit and exhibits. When: For a partition sale, the statute allows asserting contribution at any time during the partition proceeding, but it is usually safest to file well before the sale closes so the distribution instructions can be set.
  2. Exchange and organize proof: Gather rent records (leases, rent rolls, deposit records), and expense records (tax bills, insurance, repair invoices, loan statements). Prepare a simple spreadsheet showing dates, amounts, purpose, and which property each item relates to, then calculate each co-tenant’s share.
  3. Court decides credits and distribution: The clerk/judge can decide how to account for rents and how to apply credits for carrying costs and qualifying improvements, then direct how net proceeds get distributed at closing (or reserve disputed items for later decision if needed).

Exceptions & Pitfalls

  • Not every payment qualifies as a “carrying cost”: Chapter 46A focuses on actual costs that preserve value and the co-tenants’ interests (commonly taxes, insurance, repairs, and certain acquisition-loan payments). Payments that look personal, optional, or unrelated to preserving the property often draw objections.
  • Property tax lookback limit: Even if one co-tenant paid taxes for longer than a decade, the statute limits contribution for taxes to the 10 years before the partition filing (plus interest at the legal rate).
  • Documentation gaps: Cash rent collections, informal leases, or expenses paid without receipts can make the accounting fight harder. Clean records and a clear timeline usually drive better, faster rulings.
  • Multiple counties, multiple files: When properties sit in different counties, partition proceedings and sale logistics can require separate filings and separate accounting exhibits by property, even if the parties are the same.
  • Share/title disputes may not stop the sale: If co-tenants dispute ownership shares, the court can still order the sale and sort out the dispute later, which makes it important to raise accounting and credit issues early and in writing.

Conclusion

In North Carolina, the usual way to obtain a fair split of sale proceeds in a partition sale is to ask the partition court to account for rents collected and to award credits (contribution) for qualifying carrying costs paid to preserve the property. Carrying costs can include taxes, insurance, repairs, and certain loan payments, and property tax contribution is limited to taxes paid in the 10 years before the partition petition. The next step is to file an application/motion for accounting and contribution in the partition case before the sale proceeds are distributed.

Talk to a Partition Action Attorney

If a co-owner collected rent without sharing it or there is a dispute about credits for taxes, insurance, repairs, or other carrying costs in a North Carolina partition sale, our firm has experienced attorneys who can help explain options and timelines and present the accounting to the court. 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: jpierce

Attorney Jared Pierce is the founder of Pierce Law Group in Raleigh, North Carolina, a firm he established with a dedicated focus on probate administration and estate planning across North Carolina. Born and raised in the Republic of South Africa, Jared moved to Durham with his family in 2001, bringing with him a rich cultural background and a distinctive accent that often serves as a conversation starter.