Can I keep paying rent and utilities while the title transfer is still pending, and what records should I keep? – North Carolina

Short Answer

In North Carolina, rent and utility obligations usually follow the agreement that controls possession (for example, a lease, a post-closing occupancy agreement, or a written “rent-back” arrangement), not the paperwork timing of when a deed is recorded. If a sale is pending and title has not transferred, rent typically stays payable to the current owner or the owner’s authorized agent unless written notice directs payments to a new owner. Keep clear, date-stamped proof of every payment, the written instructions for where to pay, and copies of utility bills showing what services were covered and for what period.

Understanding the Problem

In North Carolina real estate transactions, a common question is: can rent and utilities continue to be paid while a title transfer is still pending, and what paperwork should be saved to prove the payments were proper. The decision point is what written arrangement controls who has the right to occupy the property during the pending period and who is responsible for monthly charges. The timing of when a deed is delivered and recorded can matter for ownership, but day-to-day payments often depend on the possession and payment terms that the parties agreed to.

Apply the Law

North Carolina generally treats “who pays what” during a pending transfer as a contract-and-possession issue. If the situation is a landlord-tenant setup and the property changes hands, North Carolina law addresses how certain tenant funds are handled when the landlord’s interest ends and requires notice to the tenant after a transfer. Separately, North Carolina has a risk-of-loss rule for real estate contracts that ties certain responsibilities to whether title or possession has transferred, unless the contract says otherwise. In practice, the safest approach is to pay only under written instructions from the current owner or authorized agent, and to keep records that show what was paid, to whom, for what period, and under what agreement.

Key Requirements

A written basis for payment: A lease, rent-back/post-closing occupancy agreement, or other written payment instructions should define rent amount, due date, payee, and what utilities are included.
Pay the correct party (or authorized agent): Payments should go to the current owner/landlord or their documented agent unless the payee changes with written notice.
Proof that payments were made and applied: Records should show the date, amount, method, recipient, and the month/service period covered, plus any allocation between rent and utilities.

What the Statutes Say

N.C. Gen. Stat. 42-54 (Transfer of dwelling units) – Addresses duties tied to termination of a landlord’s interest and requires notice to the tenant after certain transfers.
N.C. Gen. Stat. 39-39 (Risk of loss) – Sets a default rule that can shift responsibilities depending on whether legal title or possession has transferred, unless the contract provides otherwise.

Analysis

Apply the Rule to the Facts: No specific facts were provided, so two common North Carolina scenarios illustrate the recordkeeping approach. If a tenant is still renting from the current owner while the owner is selling, rent generally stays payable under the existing lease until the tenant receives written notice with new payment instructions. If a buyer is allowed to move in before recording or closing under a written occupancy agreement, the buyer should follow that document for any “rent” (often called an occupancy charge) and utilities, and keep proof that payments matched the agreement’s dates and amounts.

Process & Timing

Who sets the payment instructions: The current owner/landlord (or an authorized property manager) or, in an early-possession arrangement, the parties to the occupancy agreement. Where: Payments go to the person/entity named in the written instructions; title recording is handled through the Register of Deeds in the county where the property is located. What: Keep the signed lease/occupancy agreement and any written “pay here” notices (letter/email) that identify the payee and address or payment portal. When: Pay on the schedule stated in the controlling agreement (often monthly); do not change payees until written notice is received.
During the pending period: Save a complete payment trail each month (bank confirmation, canceled check image, money order receipt, or payment portal receipt) and match each payment to the period it covers (for example, “January rent” or “electric service 1/1–1/31”).
After transfer/closing: Watch for written notice that ownership has changed and that payment instructions have changed. Create a “handoff” file that includes the notice, the first payment made to the new payee, and final meter readings or utility transfer confirmations if utilities shift into a different name.

Exceptions & Pitfalls

Paying the wrong person: A common problem is sending rent to a prior owner after a valid written notice changes the payee. The safest practice is to require written instructions and keep them with the payment receipts.
Unclear “utilities included” terms: Disputes often come from vague agreements about which utilities are included in “rent.” The file should include the written allocation (rent vs. reimbursement), copies of bills, and proof of payment.
Early possession without a signed agreement: Moving in (or allowing someone to move in) before closing without a written occupancy agreement can create arguments about rent amount, utility responsibility, and damage risk. Written terms prevent “two stories, no paperwork.”
Cash payments without documentation: Cash makes it harder to prove payment and timing. If cash is used, a signed, dated receipt that states the month/service period and address is critical.
Security deposit mix-ups: When ownership changes, deposit handling and notices can become confusing. Keeping the move-in condition documentation and the deposit receipt helps if questions arise later.

Conclusion

In North Carolina, rent and utility payments can continue during a pending title transfer, but they should follow the written agreement that controls possession and the written instructions identifying the correct payee. The most important records to keep are the signed lease or occupancy agreement, written payee-change notices, and proof of each payment with the period covered. If ownership changes in a landlord-tenant setup, organize deposit and payment records promptly because key obligations can run on a 30-day clock.

Talk to a Real Estate Attorney

If you’re dealing with a pending title transfer and uncertainty about who should receive rent or how utilities should be handled, our firm has experienced attorneys who can help clarify the controlling documents, reduce payment disputes, and protect the paper trail. 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.