Short Answer

In North Carolina, an administrator can be reimbursed for necessary, reasonable carrying costs (like utilities, insurance, and basic maintenance) as administrative expenses if the Clerk authorizes them and the real estate is sold to pay estate debts. Ask the Clerk of Superior Court to include reimbursement authority in the sale order or the confirmation order, then document and seek approval of the specific amounts before disbursing from sale proceeds. Liens on the property (such as a reverse mortgage) are paid first.

Understanding the Problem

You are the administrator of a North Carolina estate, and the decedent’s home must be sold to satisfy a reverse mortgage and other estate expenses. Your question is: can you have the estate repay you from the sale proceeds for utilities, insurance, or essential upkeep you covered while preparing the property for sale?

Apply the Law

Under North Carolina law, a personal representative must preserve estate assets and act prudently. Real property is typically sold through a special proceeding before the Clerk of Superior Court if needed to pay estate debts. The Clerk can authorize a private or public judicial sale and may allow reasonable administrative expenses (including documented carrying costs necessary to preserve the property) to be paid from proceeds after liens are satisfied. Venue for a sale to pay debts is the county where the real property lies. Private and public judicial sales have a 10‑day upset‑bid period.

Key Requirements

• Authority to possess/manage: Obtain an order from the Clerk authorizing possession, custody, and control of the real property if needed to safeguard it pending sale.
• Sale to pay debts: File a verified petition asking the Clerk to authorize a judicial sale because proceeds are needed to pay estate debts and expenses.
• Reimbursement language: Ask the Clerk to include in the sale or confirmation order that necessary, reasonable carrying costs (e.g., utilities, insurance, basic maintenance) may be reimbursed from proceeds.
• Priority of liens: Understand that mortgage or deed‑of‑trust liens (like a reverse mortgage) are paid first; reimbursement comes from the remaining proceeds.
• Documentation: Keep receipts, invoices, and a payment log; submit them for approval with the report/confirmation or in an account.

What the Statutes Say

• North Carolina Gen. Stat. § 28A-13-3 (Powers and duties of personal representative) – sets prudent administration powers and process to control real property.
• North Carolina Gen. Stat. § 28A-17-2 (Petition to sell real property to pay debts) – outlines petition contents and parties.
• North Carolina Gen. Stat. § 28A-19-6 (Order of payment of claims) – sets the priority for costs of administration and other claims.
• North Carolina Gen. Stat. § 1-339.36 (Upset bids in private sale) – establishes the 10‑day upset‑bid period for judicial sales.

Analysis

Apply the Rule to the Facts: Because the home must be sold to satisfy a reverse mortgage and other estate expenses, you will proceed by special proceeding before the Clerk to sell the property to pay debts. In that petition, request authority to possess/manage the property and to serve as commissioner, and ask that the order authorize reimbursement of necessary carrying costs from proceeds. After the lien payoff, submit your itemized, documented expenses for the Clerk’s approval in the confirmation order or through the estate accounting.

Process & Timing

1. Who files: Administrator. Where: Clerk of Superior Court in the North Carolina county where the property is located. What: Verified petition to sell real property to pay debts (include request for possession/custody, appointment as commissioner, and reimbursement authority). When: As soon as you determine the estate needs the sale proceeds to pay debts/expenses.
2. Obtain the sale order; conduct a judicial sale (public or request private sale). File a Report of Sale and allow the statutory 10‑day upset‑bid period. Then seek an Order of Confirmation.
3. With confirmation, request approval to disburse: first, lien payoffs and court‑approved costs of sale; then, reimbursement of documented carrying costs as administrative expenses; then proceed to the interim/final account reflecting these disbursements.

Exceptions & Pitfalls

• Heirs/devisees not served: Failing to make them parties and serve them by Rule 4 can render a sale order void as to that person.
• No prior authority: Paying utilities/maintenance without Clerk authorization or a will provision can jeopardize reimbursement; ask for authority up front.
• Liens eclipse proceeds: Reverse mortgage or other liens must be paid first; if proceeds are insufficient, some or all carrying costs may not be recoverable.
• Bond and role overlap: If you serve as commissioner, ensure bond sufficiency and avoid “double‑dipping” on compensation; all fees/expenses require Clerk approval.
• Documentation gaps: Missing receipts or vague entries risk disallowance; keep clear, contemporaneous records.

Talk to a Probate Attorney

If you’re dealing with a court‑approved sale of estate real property and need reimbursement for carrying costs, our firm has experienced attorneys who can help you understand your options and timelines. 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.