Short Answer

In North Carolina, once you know about a material defect, disclose it in writing and decide—promptly and in good faith—whether to repair, offer a credit, or renegotiate during the buyer’s due diligence period. If you are selling as a personal representative of an estate, act in the estate’s best interests, document your decision, and confirm you have authority to sell (with or without court approval) before committing estate funds to repairs or price reductions.

Understanding the Problem

In North Carolina, can a seller—especially a personal representative handling a relative’s home—disclose and address a newly discovered defect (a hole in the subfloor) flagged by a buyer’s inspection during due diligence? Here, you verified the damage personally. The practical decision is what you must disclose and whether to repair or negotiate a credit so the sale can proceed.

Apply the Law

Under North Carolina law, a seller must not mislead buyers about property condition. When a defect is discovered after listing, best practice is to disclose the known, material facts in writing and decide on repair or a price concession during the due diligence period. When the seller is a personal representative (PR) of an estate, the PR must preserve estate assets, act prudently for all heirs, and ensure proper authority to sell (power of sale under a will or court approval if needed). The Clerk of Superior Court is the forum that oversees estate sales requiring approval, and judicial sales include a 10-day upset bid period after confirmation of the high bid if applicable.

Key Requirements

• Confirm sale authority: Determine whether the will gives a power of sale or if a special proceeding and court order are required. If heirs are selling within two years of death, the PR typically must join the deed.
• Disclose known defects: Once you know of a material subfloor defect, disclose it in writing to the buyer (and update any prior disclosure) to avoid misrepresentation.
• Decide repair vs. credit prudently: Evaluate cost, timing, and impact on the estate; negotiate repairs or a credit within the due diligence period and document the rationale for your files and accounting.
• Control communications: The PR—not a sibling or third party—makes decisions. Direct the broker to route all negotiations through the PR (or counsel) and memorialize decisions in writing.
• Use appropriate deed and recordkeeping: In estate sales, avoid a general warranty deed; use a PR deed without warranties or a limited warranty deed, and capture any repair payments or credits in the estate accountings.

What the Statutes Say

• North Carolina Gen. Stat. § 28A-13-3 (PR powers and duties) – PR must act prudently to preserve estate assets and may seek court authority to control real property.
• North Carolina Gen. Stat. § 28A-15-1 (Real property as estate asset) – Real property can be used to pay claims when in the estate’s best interest; selection must be prudent.
• North Carolina Gen. Stat. § 28A-17-12 (Sales by heirs or devisees) – Within two years of death, heirs’ sales generally require PR participation to bind creditors and the estate.
• North Carolina Gen. Stat. § 1-339.36 (Upset bids) – Judicial and authorized private sales include a 10-day upset bid period.

Analysis

Apply the Rule to the Facts: You verified a hole in the subfloor, so you now have actual knowledge of a material defect. Disclose this in writing and update any prior disclosure to avoid misleading the buyer. As PR, decide whether to repair or credit based on cost, timing, and the estate’s best interests, and document your decision for the estate accounting. If sale authority is unclear (no power of sale in the will), seek guidance on whether you must petition the Clerk for approval before committing to repairs or concessions.

Process & Timing

1. Who files: The personal representative. Where: Clerk of Superior Court in the North Carolina county where the property sits (if a special proceeding is needed). What: Petition for authority to sell real property (and to take possession/control if needed). When: Before signing a deed or making major repair expenditures if you lack a power of sale or title authority.
2. During due diligence, send a written disclosure of the subfloor defect to the buyer, then negotiate a repair agreement or credit. Coordinate contractors and obtain written estimates if considering repairs; adjust timelines because county practices and contractor availability can vary.
3. If court approval is required, expect a hearing before the Clerk and, if a judicial or authorized private sale is used, a 10-day upset bid period before the sale can be finalized. Close by delivering a PR deed without general warranties, and record all repair costs or credits in the estate’s accountings.

Exceptions & Pitfalls

• If the will lacks a power of sale and you need to sell to pay claims, you may need a special proceeding and court order before proceeding. Failing to obtain needed authority can delay or unwind the sale.
• Heir interference: The PR controls decisions. Keep communications centralized; ask the broker to follow the PR’s instructions only. If broker conduct is problematic, elevate to the broker-in-charge or consider replacing the firm.
• Disclosure traps: Do not minimize or conceal the defect. Update prior disclosures in writing and share contractor findings to avoid claims of misrepresentation.
• Deed liability: Avoid signing a general warranty deed as PR; use a PR deed without warranties or limited warranties to protect the estate.
• Accounting: Repairs paid from estate funds and any credits must be documented in receipts/disbursements to the Clerk.

Talk to a Real Estate Attorney

If you’re dealing with a buyer’s inspection that uncovered a subfloor defect during an estate sale, our firm has experienced attorneys who can help you understand your options 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.