How a North Carolina Co-Owner Can Buy Out the Other’s Interest and Avoid a Forced Sale
Detailed Answer
Why a Buyout Is Often Better Than a Court-Ordered Sale
The clerk of superior court may order a public sale when co-owners (also called tenants in common) cannot agree on what to do with the property. Public sales cost money, take time, and usually net less than a private transaction. By purchasing the other owner’s share before the clerk enters a sale order, you keep control of timing, price, and closing costs.
Option 1 – Negotiate a Private Purchase Before Any Lawsuit Is Filed
- Valuation. Agree on an appraiser or obtain two independent appraisals and average the numbers.
- Contract. Use a standard North Carolina Offer to Purchase and Contract modified for a tenancy-in-common buyout.
- Deed & Closing. At closing the selling co-owner signs a North Carolina Special Warranty Deed; the buying co-owner records it with the county register of deeds.
This approach avoids court costs entirely.
Option 2 – Settle After a Partition Action Is Filed (Non-“Heirs Property”)
Even after someone files a partition action, G.S. 46A-11 encourages settlement. The parties may:
- File a consent order dismissing the case once the buyout funds transfer.
- Ask the clerk to approve the settlement and deed if minor or unknown heirs are involved.
Option 3 – Statutory Buyout for “Heirs Property” (Uniform Partition of Heirs Property Act)
If the land qualifies as “heirs property” (generally, family land with no single owner holding more than a 50 percent interest), then G.S. 46A-85 gives any co-owner an automatic right to buy out the interests of those who request a sale.
- The clerk determines the fair market value by appraisal or agreement (G.S. 46A-82).
- The buying co-owner deposits the pro-rata share of that value with the clerk within 45 days.
- If funds are timely deposited, the clerk orders the deed to the buyer; the partition action ends.
This statutory path is quick, predictable, and applies statewide.
Option 4 – Purchase at a Private or Public Sale
If no buyout occurs before a sale order, you may still bid at the sale (G.S. 46A-74). Be prepared to:
- Post the required deposit (often 5%) with the commissioner.
- Survive upset-bid periods (10 days per G.S. 1-339.64).
Funding Your Buyout
- Refinance or obtain a cash-out mortgage secured by the entire property after closing.
- Use a home-equity line if you already own another property.
- Negotiate owner financing—seller accepts installment payments and retains a deed of trust.
Paperwork Checklist
- Executed deed (usually special warranty).
- Excise tax calculation and Revenue Stamps.
- Settlement statement (ALTA or NC‐Bar form).
- Lien payoff letters (if any).
- Updated owners-title insurance policy.
Tax and Contribution Adjustments
The sales price should reflect each co-owner’s unequal contributions to mortgage payments, taxes, or improvements. North Carolina allows the clerk to consider these equitable adjustments under G.S. 46A-61.
Do You Need Court Approval?
Court approval is required if:
- Any co-owner is a minor, incompetent, or deceased with unknown heirs.
- The property is subject to a filed partition action and no dismissal order has been entered.
Otherwise, a straight private buyout requires no court involvement.
Helpful Hints
- Put all valuation conversations in writing to avoid later disputes.
- Run a title search before paying any money—undisclosed liens survive a buyout.
- Account for ad valorem taxes through the closing date.
- If you plan to finance, speak with a lender early; some lenders need 30–45 days post-contract.
- File a memorandum of settlement with the clerk if a partition case is already pending.
Bottom Line: North Carolina law gives co-owners several ways to purchase the other’s share and keep the property—ranging from an informal agreement to the formal statutory buyout under the Uniform Partition of Heirs Property Act. Acting early saves money and preserves family land.
Our firm regularly guides clients through partition negotiations, clerk hearings, and private closings. If you need help structuring a buyout or defending your ownership rights, call us today at (919) 341-7055 for a confidential consultation.
