How a Co-Owner Can Recover the Cost of Improvements to Estate Property in North Carolina

1. Detailed Answer

When two or more people inherit the same piece of real estate, one co-owner may spend personal funds to replace a roof, remodel the kitchen, or pay property taxes. If a partition action later becomes necessary, North Carolina law allows that co-owner to ask the court for reimbursement—called a credit or allowance—for those improvements.

Key Legal Authority

• N.C. Gen. Stat. § 46A-92 – authorizes the court to adjust the shares of co-tenants for expenditures that “preserve or improve” the property.
• § 46A-90 – empowers the clerk or superior court judge to order an accounting of rents, profits, taxes, insurance, and improvement costs.
• North Carolina case law, including Smith v. Underwood, 127 N.C. App. 1 (1997), confirms that equitable credits are appropriate when improvements increase the property’s value.

Step-by-Step Process

1. File a Partition Petition. A co-owner starts by filing a petition for partition with the clerk of superior court in the county where the land sits. In the petition, include a specific request for reimbursement or owelty (money paid to equalize shares).
2. Document the Improvements. Provide:
   • Canceled checks, receipts, or contractor invoices.
   • Before-and-after photos, building permits, inspection reports.
   • Proof of payment for taxes, insurance, or mortgage interest, if claimed.
3. Show Added Value, Not Just Cost. The court will only credit reasonable expenditures that increased the fair market value or preserved the property. An appraiser’s report comparing the value with and without the improvements is persuasive evidence.
4. Attend the Accounting Hearing. Under §§ 46A-90 & 92 the clerk may hold an evidentiary hearing—often called an accounting. Each co-owner presents evidence. The opposing owners can challenge costs that are excessive, cosmetic, or purely personal.
5. Receive a Credit in the Final Order.
   • If the property is physically divided, the improver may receive the upgraded portion or a larger share of acreage equal to the credit.
   • If the court orders a sale, the commissioner will subtract the credit from the sale proceeds before distributing net funds to the other co-owners.

Hypothetical Example

Ella and Marcus inherit their father’s Wake County home 50/50. Ella spends $25,000 on a new roof and $5,000 on overdue taxes. Two years later, Marcus petitions for a sale in partition. During the accounting hearing, Ella produces invoices and a certified appraisal showing the roof increased the home’s value by $22,000. The clerk finds the roof was necessary and orders a credit of $22,000 plus the full $5,000 tax payment. When the house sells for $300,000, the commissioner deducts a $27,000 credit to Ella; the remaining $273,000 is split equally, so Ella ultimately receives $163,500 and Marcus receives $136,500.

2. Helpful Hints

• Keep every receipt and photograph from day one—proof drives reimbursement.
• Talk to co-owners before making major upgrades; voluntary agreements reduce future disputes.
• Only necessary and value-adding work qualifies. Luxury items rarely earn full credit.
• File your partition action promptly. Delay can make it harder to trace expenses or show increased value.
• Consider mediation. Many counties require it, and it can lock in an agreed credit without a hearing.

Take the Next Step

If you improved inherited property and now face a partition, you do not have to lose your investment. Our North Carolina partition attorneys routinely secure fair reimbursements for clients statewide. Call (919) 341-7055 or email intake@piercelaw.com today for a confidential consultation and protect the money you have put into the property.