Dec262025
Probate Q&A Series

If a co-owner lives in the house and is paying the mortgage, do the other co-owners owe reimbursement, and does the occupant have to pay rent or just utilities? – North Carolina

Short Answer

In North Carolina, co-owners generally can seek contribution for certain “carrying costs” (like mortgage payments, property taxes, insurance, and necessary repairs), but a co-owner who has exclusive possession often cannot charge the other co-owners “rent” unless a court finds the occupant excluded the others or the occupant collected rent from third parties. In a partition case, North Carolina statutes also limit or shape reimbursement and accounting, including special rules where the occupant had exclusive possession. Utilities are usually treated differently from mortgage/taxes/insurance because they are personal living expenses tied to occupancy, not preserving the ownership interest.

Understanding the Problem

In North Carolina probate, an intestate death can leave heirs owning a home together as co-owners while one relative continues living in the property and paying the mortgage. The decision point is whether the non-occupying co-owners must reimburse the occupant for mortgage and other house expenses, and whether the occupant must pay “rent” to the other co-owners or only cover items like utilities. This question often matters most when the family is considering an agreement to keep or sell the home, or when a partition case may be filed if no agreement is reached.

Apply the Law

North Carolina treats most co-owned inherited real estate as owned by the heirs (not the probate estate) as of the date of death, and the heirs typically bear post-death expenses of the property. Separately, North Carolina has statutes governing what one cotenant can recover from another for property-related payments and how courts handle reimbursements and rent/profit accounting in partition and cotenancy disputes. The usual forum for a forced sale or division is a partition proceeding in the North Carolina Superior Court.

Key Requirements

  • Type of payment: Courts separate “carrying costs” that preserve the property (for example, property taxes, homeowner’s insurance, necessary repairs, and loan payments to acquire the property) from personal living expenses (like many utilities).
  • Exclusive possession vs. shared possession: Whether the occupant had exclusive possession can affect reimbursement rights for certain items (especially interest on an encumbrance and some repairs-related claims).
  • Rents/profits actually received: A co-owner generally shares proportionally in “rents and profits” received from third parties, and a co-owner who received more than a fair share can face an accounting claim.

What the Statutes Say

Analysis

Apply the Rule to the Facts: The facts describe an intestate estate where a relative lives in a co-owned home and is paying the mortgage while other heirs/co-owners may want a sale and may consider partition. Under North Carolina practice, the heirs typically bear post-death expenses of the inherited home, so mortgage/taxes/insurance often get treated as co-owner issues rather than ordinary estate-administration expenses. If a partition case is filed, the occupant will likely argue for credits or contribution for carrying costs (including loan payments, taxes, insurance, and repairs), while the other co-owners may argue that any claim for “rent” depends on whether the occupant collected rent from third parties or excluded other co-owners from using the property.

Process & Timing

  1. Who files: Any cotenant (co-owner), and in some situations a personal representative if partition is part of selling a deceased cotenant’s interest to pay estate debts. Where: North Carolina Superior Court in the county where the property is located. What: A partition petition naming and serving all cotenants and other interested parties (like lienholders). When: Often filed after it becomes clear no agreement will be reached; if property-tax contribution is being pursued through a partition claim, the statute limits the look-back for property taxes to the 10 years before filing (plus legal-rate interest).
  2. Credits and accounting requests: During the partition case, a cotenant can apply for contribution/credits for carrying costs and certain improvements, and a cotenant can seek accounting of rents/profits if another cotenant received more than a proportional share.
  3. Outcome: The court will order an actual partition (physical division) if feasible, or a partition sale if not, and the court can account for approved credits/liens and distribute net proceeds among the cotenants according to ownership shares.

Exceptions & Pitfalls

  • Mortgage “principal” vs. “interest” can be treated differently: North Carolina statutes specifically restrict reimbursement for interest during periods of exclusive possession; that can change the math when one co-owner lives in the house and makes full mortgage payments.
  • Utilities often are not “carrying costs”: Many utilities function like personal consumption tied to living in the home. Even when co-owners agree to share some services, courts commonly focus contribution claims on costs that preserve value and protect the ownership interest (taxes, insurance, necessary repairs, and acquisition-loan payments).
  • No automatic “rent” just because one co-owner lives there: A common mistake is assuming the occupant must pay rent to the others in every case. Rent/profit accounting usually centers on third-party rents/profits actually received or situations where one co-owner wrongfully excluded another.
  • Documentation problems: Reimbursement claims rise or fall on proof. Missing mortgage statements, tax bills, insurance declarations, and receipts can lead to disputes or reduced credits in court.
  • Probate vs. co-owner issues: In intestate situations, heirs often own the real estate directly after death. That means disputes about occupancy, reimbursement, and rent frequently belong in an agreement among heirs or in a partition case, not in ordinary estate-account paperwork.

Conclusion

In North Carolina, when heirs or other cotenants co-own a home and one cotenant lives there while paying the mortgage, the occupant may be able to seek contribution or credits for defined “carrying costs” (such as taxes, insurance, and certain loan payments), but exclusive possession can limit reimbursement for interest and some repair claims. The occupant does not automatically owe rent to the other co-owners unless rents/profits were received or the others were excluded. A common next step is to file a partition petition in Superior Court if no agreement is possible.

Talk to a Probate Attorney

If a family is dealing with an inherited home where one co-owner is living in the property, paying the mortgage, and disagreeing about sale versus keeping the home, a probate attorney can help clarify who is responsible for which expenses, what records to gather, and how a partition case would handle credits and accounting. Call 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: Probate 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.