Recovering Foreclosure Surplus Funds and Requesting Attorney Fees in North Carolina
FAQ 1: How do I recover surplus funds from a foreclosure sale under N.C. Gen. Stat. § 45-21.32?
In North Carolina, a party who believes there are surplus proceeds after a foreclosure may file a special proceeding under N.C. Gen. Stat. § 45-21.32. This statute grants the clerk of superior court jurisdiction to determine proper distribution of funds remaining after sale costs, liens and senior encumbrances. In Durham County or any county, you must check with the local county clerk’s office for specific filing requirements.
Basics of the process:
- Identify the statute: Cite N.C. Gen. Stat. § 45-21.32 (ncleg.gov/GS_45-21.32.html).
- Prepare a petition: Include the case number for the foreclosure, the names and legal names of all parties (e.g., John Q. Public vs. Estate of Jane Public), a clear timeline of the decedent’s date of death versus sale date, and a statement of the amount claimed.
- Name parties accurately: Use full legal names for all individuals and estates to avoid confusion. Courts often require verification of legal name by death certificate, certified judgment, or other official document.
- File with the county clerk: Submit your petition in the county where the foreclosure sale occurred—Durham County Clerk of Superior Court if the sale was in Durham County. Pay the filing fee and request summons for interested parties.
- Notify parties and schedule hearing: Serve all potential claimants with notice of the hearing date. If a respondent appears, be prepared to provide title work or affidavits to support your position.
- Obtain ruling and distribution order: After the hearing, the clerk will enter an order directing payment of surplus funds. Checks typically go to the estate representative or claimant as directed in the order.
For a step-by-step guide, see our post on special proceeding requirements: Special Proceeding for Surplus Funds.
FAQ 2: How are reasonable attorney fees determined and awarded under N.C. Gen. Stat. § 45-21.32(d)?
Under N.C. Gen. Stat. § 45-21.32(d), the clerk may award reasonable attorney fees to the prevailing party in a special proceeding. The statute does not mandate fees but gives the court discretion. Courts look to the time spent, the complexity of title work, the presence of a responder, and customary rates in the county (e.g., Durham County market rates).
Key points for obtaining fees:
- File a separate motion for fees: Draft a concise motion stating hours worked, type of services, hourly rates (or contingency arrangement), and total amount requested (e.g., $7,409.89).
- Provide supporting documentation confidentially: Supply a billing statement or affidavit that details hours by task, paralegal work, attorney rates, and any advanced costs. Mark it confidential if required by local rules.
- Consider opposing objections: If a respondent objects, be ready to explain why your fee request is reasonable under the circumstances. Highlight any novel legal issues or extensive title searches needed.
- Clerk’s review and hearing: The clerk may hold a short hearing if objections arise. You can often avoid a full hearing by agreement on fees or by submitting declarations from local practitioners on customary rates.
- Entry of fee order: Once approved, the clerk will issue an order directing payment of attorney fees from the surplus before distribution to claimants.
For guidance on fee petitions, refer to our attorney fee guide: Reasonable Attorney Fees in Probate.
At Pierce Law Group, our attorneys have 15 years of experience guiding clients through North Carolina probate special proceedings. If you need help recovering surplus funds or requesting attorney fees under N.C. Gen. Stat. § 45-21.32, contact us for a consultation. Email intake@piercelaw.com or call us at (919) 341-7055.
