Dec272025
Partition Action Q&A Series

What should be included in a written settlement agreement for selling a jointly owned home? – North Carolina

Short Answer

In North Carolina, a written settlement agreement for co-owners who want to sell a jointly owned home should clearly cover (1) how the property will be listed and sold, (2) how sale proceeds will be handled and divided, and (3) how one co-owner’s claimed reimbursement for carrying costs (like taxes and insurance) will be documented and paid from the closing proceeds. The agreement should also include practical “what if” terms, such as what happens if there is no acceptable offer by a certain date, how price reductions are decided, and how disputes are resolved. Clear, signed terms can prevent the need for a court-ordered partition sale.

Understanding the Problem

In North Carolina, when co-owners want to avoid a partition action, the key decision point is: can the co-owners create a written, enforceable plan to list and sell the home and then divide the net proceeds in a predictable way, including any agreed reimbursement for one co-owner’s property taxes, insurance, or other carrying costs? The settlement agreement needs to spell out who has authority to choose the listing agent, approve an offer, sign closing documents, and how credits and offsets will be handled at closing. The goal is to reduce uncertainty so the sale can happen without a court supervising the process.

Apply the Law

North Carolina partition law recognizes that co-owners sometimes need a court process to sell or divide property, and it also recognizes that co-owners can seek contribution (reimbursement) for certain property-related costs in a partition proceeding. A good settlement agreement borrows that structure: it defines the co-owners’ shares, sets a sale process, and creates a clear accounting method for expenses and credits so the closing agent can distribute proceeds correctly. Even when the parties settle privately, it helps to mirror concepts the court would consider in a partition accounting, especially around “carrying costs” and proof of payment.

Key Requirements

  • Sale authority and mechanics: Identify who can select the realtor, set the initial list price, approve price changes, accept an offer, and sign listing and closing documents (and what happens if a co-owner refuses).
  • Expense accounting and contribution terms: Define what expenses qualify for reimbursement (for example, property taxes, insurance, necessary repairs, and loan payments tied to acquiring/preserving the property), what proof is required, and how the credit will be applied from sale proceeds.
  • Proceeds distribution and closing instructions: Specify how “net proceeds” will be calculated (commissions, liens, closing costs, agreed reimbursements) and then divided by ownership percentage, with written instructions to the closing attorney or title company.

What the Statutes Say

Analysis

Apply the Rule to the Facts: The co-owners want to avoid a partition case by agreeing to list the home with a mutually acceptable realtor, so the agreement should focus first on sale authority and a decision process for listing terms, offers, and price reductions. Because one side has been paying carrying costs like taxes and insurance and wants an offset supported by receipts, the agreement should define “carrying costs,” require documentation, and state exactly how those costs will be credited at closing before the remaining net proceeds are split. Without these terms, the parties often end up disputing reimbursements and sale decisions, which is one of the most common triggers for a later partition filing.

Process & Timing

  1. Who signs: All titled co-owners. Where: Privately (not a court filing), with closing instructions delivered to the closing attorney handling the transaction in North Carolina. What: A written settlement agreement plus a written direction letter to the closing attorney that matches the agreement’s proceeds waterfall. When: Before the listing agreement is signed and before the property is marketed.
  2. Listing and sale steps: The agreement should set an initial list date, an initial list price method (for example, based on a broker price opinion or appraisal), and a written schedule for price adjustments (for example, reductions after set time periods without an acceptable offer), with a tie-breaker method if co-owners disagree.
  3. Closing distribution: After contract and before closing, the co-owners should exchange an expense ledger with receipts and confirm the final reimbursement numbers so the closing attorney can prepare a settlement statement that matches the agreement.

Exceptions & Pitfalls

  • Unclear “carrying costs” definitions: If the agreement does not define which expenses qualify (taxes, insurance, necessary repairs, mortgage payments, utilities, HOA dues), the parties can fight later about what gets reimbursed. Using a defined list and requiring receipts reduces conflict.
  • No decision rule for offers and price changes: Without a voting rule (unanimous vs. majority), a tie-breaker, or a pre-agreed reduction schedule, one co-owner can effectively block the sale. The agreement should address deadlock and give a practical path forward.
  • Title and lien surprises: Unknown liens, judgments, unpaid taxes, or a disputed ownership share can derail closing. The agreement should require an early title search and state how lien payoffs and title curative work will be handled and paid.
  • Repair and improvement disputes: Improvements and repairs can be treated differently in an accounting. The agreement should state whether repairs need advance written approval, whether there is a spending cap, and whether improvements will be reimbursed (and if so, how they will be valued).
  • Signing and performance problems: If one co-owner later refuses to sign a listing agreement, contract, or deed, the settlement should state what happens next (for example, a required mediation step, or consent to file a partition action if the sale cannot proceed).

Conclusion

In North Carolina, a strong written settlement agreement for co-owners selling a jointly owned home should (1) set the sale process (realtor selection, list price, offer approval, and price reductions), (2) create a clear accounting method for reimbursing agreed carrying costs supported by receipts, and (3) instruct the closing attorney on the exact order for paying costs, credits, and then splitting net proceeds by ownership share. The most important next step is to reduce the agreement to a signed writing and deliver written closing instructions before the home is listed.

Talk to a Partition Action Attorney

If co-owners are trying to sell a jointly owned home and avoid a partition case, a carefully written settlement agreement can prevent delays and reduce the risk of a later dispute about listing decisions or reimbursement for taxes and insurance. Our firm has experienced attorneys who can help structure the agreement, document the expense credits, and protect the timeline to closing. 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.