What Is a Commissioner’s Sale in a North Carolina Partition Action, and How Does the Upset Bid Process Work?

1. Detailed Answer

Commissioner’s Sale in a Partition Action

When co-owners of real estate cannot agree on possession or use, any owner may file a partition action under Chapter 46 of the North Carolina General Statutes. Instead of physically dividing the land, the court often orders the property sold. It appoints a commissioner—a neutral official—to handle the sale. Under N.C. Gen. Stat. § 46-4, the commissioner must:

• Appraise or obtain an appraisal of the property.
• Advertise the sale in a local newspaper and at the courthouse.
• Set a minimum bid, usually no less than two-thirds of the appraised value, unless the court orders otherwise.
• Conduct a public auction—typically on the courthouse steps or the property itself.
• Accept the highest bid and collect a deposit, commonly 10% of the purchase price, payable immediately.

The Upset Bid Process

North Carolina law gives any interested party the right to outbid the initial purchaser through an upset bid. Article 4 of Chapter 45 governs this process. Under N.C. Gen. Stat. § 45-21 and related sections, the upset bid process follows these steps:

1. Initial Deposit: The successful bidder at auction must deposit 10% of the purchase price immediately.
2. Upset Bid Window: Within three business days after the sale, any person may deliver to the commissioner a written upset bid at least 5% higher than the initial purchase price, plus an additional 10% deposit on the upset bid amount.
3. Notice to Prior Purchaser: The upset bidder must serve the notice of upset bid on the original purchaser and any other interested parties as specified by statute.
4. New Bid and Deposit: The upset bidder’s deposit secures their new offer. If multiple upset bids arrive, each must exceed the last accepted bid by at least 5% and include the required deposit.
5. Final Report and Confirmation: Once four business days pass without a further upset bid, or no valid further bids appear, the commissioner files a sale report in the court clerk’s office. The court then confirms the sale. The highest bidder after the upset bid period becomes the final purchaser.

2. Key Points to Remember

• Partition actions seek to divide or sell co-owned property under Chapter 46.
• The court appoints a commissioner to appraise, advertise, and sell the property.
• Buyers at commissioner’s sales usually pay a 10% deposit at auction.
• Under Chapter 45, Article 4, upset bids let third parties outbid the initial purchaser.
• Each upset bid must exceed the prior bid by at least 5% and include a 10% deposit.
• The sale becomes final only after the upset bid period ends and the court confirms the commissioner’s report.

Call to Action

Understanding a commissioner’s sale and the upset bid process can protect your rights and maximize your return in a partition action. The attorneys at Pierce Law Group guide clients through every step of the sale and bidding process. If you face a partition action or want to explore your options, contact us today:

Email: intake@piercelaw.com
Phone: (919) 341-7055