Dec282025
Real Estate Q&A Series

Can I structure a deal so I get paid without giving up ownership through a deed transfer? – North Carolina

Short Answer

Yes. In North Carolina, several deal structures can allow someone to receive payments while keeping record title in the current owner’s name, at least for a period of time (for example, a contract for deed or a lease with an option to buy). The right structure depends on whether the deal is really a sale being paid over time, a landlord-tenant arrangement, or a loan secured by the property. Some options require specific disclosures and fast recording deadlines, and the wrong structure can create foreclosure, eviction, or title problems.

Understanding the Problem

In North Carolina real estate deals, a common question is whether an owner can receive money from another party while keeping ownership on the public record and delaying a deed transfer. The decision point is whether the transaction is intended to function like a sale that will later require delivery of a deed, versus a lease that may or may not result in a purchase, versus a loan arrangement where the property serves as collateral. The answer turns on what rights the other party receives during the payment period and what remedy applies if payments stop.

Apply the Law

North Carolina generally allows parties to structure real estate transactions so that the deed is not transferred at the beginning of the deal, but the law treats different structures differently. A sale paid over time (such as a contract for deed) must meet statutory content and recording rules. A lease-option can stay a landlord-tenant relationship during the lease term. Contracts involving an interest in land typically must be in writing. If a party wants to protect an option or purchase contract against later buyers and lenders, North Carolina allows recording a short “memorandum” instead of recording the entire agreement.

Key Requirements

  • Use a written, signed agreement: Deals that sell or convey an interest in land (or long-term leases) generally need a written contract signed by the party who could be sued on it.
  • Pick the right structure for the intended remedy: A lease-based deal usually relies on eviction remedies if payments stop; a sale/financing structure may require foreclosure-type steps or court action, depending on the documents.
  • Record the right notice in the right place and on time: Many arrangements can be protected by recording in the county register of deeds (for example, a memorandum of option/contract). Contracts for deed have a short recording deadline and specific minimum contents.

What the Statutes Say

Analysis

Apply the Rule to the Facts: Because no specific facts were provided, consider two common North Carolina scenarios. If the goal is a “sale paid over time” where the buyer takes possession now but the seller keeps the deed until the price is paid, North Carolina often treats that as a contract for deed, which triggers required contract terms and a fast recording requirement. If the goal is “rent now, maybe buy later,” a lease with an option can keep ownership with the landlord during the lease term, while separately giving the tenant a documented purchase right.

Process & Timing

  1. Who files: The party responsible under the deal document (often the seller/option seller). Where: The Register of Deeds in the North Carolina county where the property is located. What: Often a recorded memorandum of option or memorandum of contract to purchase (instead of the whole agreement), or a recorded contract for deed / Memorandum of a Contract for Deed when that structure is used. When: For a contract for deed, record the contract or memorandum within five business days after the contract is signed and acknowledged.
  2. Document the payment deal clearly: The agreement should spell out payment amount and due dates, who pays taxes/insurance/repairs during the payment period, what counts as default, and what cure rights exist before the deal can be terminated.
  3. Plan for the end of the deal: If the buyer/tenant completes the requirements, the parties usually move to a standard closing and deliver/record a deed. If the buyer/tenant defaults, the next step depends on the structure (for example, eviction under landlord-tenant rules versus enforcing default remedies stated in a contract for deed and, when required, using court procedures to terminate rights).

Exceptions & Pitfalls

  • Mislabeling the deal: Calling a deal a “lease” does not automatically make it one. If the economic reality is a sale being paid over time with the buyer building equity, the documents may need to comply with statutes that apply to contracts for deed or related consumer-protection rules.
  • Recording mistakes: Not recording (or recording the wrong notice) can leave the paying party exposed if the property is later mortgaged or sold to someone else. When using a memorandum, it must include the statutory minimum information and be properly notarized and recorded to provide notice.
  • End-date and notice problems: A recorded memorandum must include an expiration date, and the law can limit enforceability against later creditors/purchasers after key dates pass. If the deal is extended, a recorded extension may be needed.
  • Default remedies not matching the structure: Eviction is a landlord-tenant remedy; foreclosure is a secured-lending remedy. Using the wrong approach can delay enforcement and increase cost.
  • Taxes: Different structures can change property tax, transfer tax, and income tax outcomes. A tax attorney or CPA should review the plan before signing.

Conclusion

In North Carolina, a deal can be structured so payments are received without an immediate deed transfer, but the structure must match the real purpose of the transaction. Common approaches include a contract for deed for a delayed-transfer sale and a lease with an option for a rent-first arrangement. Key requirements include a signed writing, clear default and cure terms, and proper recordation in the register of deeds. For a contract for deed, the contract or memorandum must be recorded within five business days after signing and acknowledgment.

Talk to a Real Estate Attorney

If a deal needs payment flexibility without an immediate deed transfer, experienced attorneys can help choose a lawful structure, draft the documents, and protect the transaction with proper recordation 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.

Category: Real Estate 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.