Dec242025
Real Estate Q&A Series

How should a deed be written to protect me if the buyer stops making payments? – North Carolina

Short Answer

In North Carolina, protection usually comes from choosing the right structure—not from adding payment terms into the deed itself. If the goal is for the property to stay in the seller’s name until paid in full, a properly drafted contract for deed (also called an installment land contract) can do that, but it must meet specific statutory requirements and follow a required default-and-cure process before any forfeiture. If the deed is transferred now, the common way to protect the seller is a promissory note secured by a deed of trust, which allows foreclosure if payments stop.

Understanding the Problem

In North Carolina real estate transactions, the key decision is whether a seller can transfer possession while keeping legal title until the buyer finishes paying, and what happens if the buyer stops making payments. The question focuses on how the paperwork should be set up so the seller has enforceable remedies if the buyer defaults, and whether the property can remain in the seller’s name until the purchase price is paid in full.

Apply the Law

North Carolina generally treats a deed as the document that transfers title, while payment terms and default remedies usually belong in a separate contract and (often) a recorded security instrument. If a seller wants to keep title until the buyer completes payments, North Carolina law allows a contract for deed, but Chapter 47H requires specific contents, timely recording, and a mandatory notice-and-cure process before forfeiture. If the seller conveys the deed now, the seller typically protects the unpaid balance with a promissory note and deed of trust; upon default, the secured creditor may use a foreclosure process that begins with a clerk of superior court hearing and notice requirements.

Key Requirements

  • Use the right instrument for the goal: Keeping title in the seller’s name points toward a contract for deed; transferring title now points toward a deed plus a note and deed of trust.
  • Put payment and default terms in the contract/security documents: The installment schedule, late charges (if any), taxes/insurance responsibility, and default remedies should be clear and consistent across documents.
  • Follow North Carolina’s required notice and recording steps: Contracts for deed have statutory minimum terms and recording deadlines; deeds of trust have a formal foreclosure process with notice and a clerk hearing.

What the Statutes Say

Analysis

Apply the Rule to the Facts: The stated goal is that the property stays in the current owner’s name until paid in full, while allowing the family member to pay over time. Under North Carolina law, that structure aligns more closely with a contract for deed than with “putting stipulations in the deed,” because a deed generally transfers title when delivered and recorded. If payments stop, the seller’s remedy depends on the chosen structure: with a contract for deed, the seller must give the statutory notice of default and a cure period before attempting forfeiture; with a deed of trust, the seller would pursue foreclosure through the clerk of superior court process.

Process & Timing

  1. Who files: For a contract for deed, the seller records the contract or a memorandum. Where: Office of the Register of Deeds in the county where the property is located. What: A recorded copy of the contract for deed or a compliant memorandum. When: Within five business days after the contract is signed and acknowledged by both parties (statutory recording deadline).
  2. If there is a missed payment: For a contract for deed, the seller serves a notice of default and intent to forfeit with specific required information and a cure date. The cure date must be at least 30 days after service (or longer if the contract gives more time).
  3. If default is not cured: For a contract for deed, the buyer’s equitable redemption rights are not simply “signed away” in advance; termination typically requires either a recorded mutual termination or a court order/judgment that ends the buyer’s rights, followed by recording. For a deed-of-trust structure, the secured creditor typically starts a power-of-sale foreclosure by filing for a hearing before the Clerk of Superior Court and serving the parties entitled to notice under the statute.

Exceptions & Pitfalls

  • Trying to “keep the deed in escrow” without a compliant structure: Informal arrangements can create title, financing, and enforceability problems, especially if possession changes hands but the documents do not match the deal.
  • Missing required contract-for-deed terms or disclosures: Chapter 47H sets minimum contents (including payment terms, cure rights, and responsibilities for taxes/insurance/repairs). Omissions can weaken enforcement and create disputes later.
  • Improper forfeiture language or shortcuts: North Carolina law limits forfeiture and requires notice and an opportunity to cure; documents that attempt to waive or extinguish redemption rights before default may not work as intended.
  • Notice/service mistakes after default: For contracts for deed, the default notice must be served by hand or using a method allowed by Rule 4, and it must include required details. For foreclosure, the clerk-hearing notice requirements are technical and mistakes can cause delays.
  • Tax and lending issues: Seller financing inside a family can still trigger tax and lender concerns (for example, if an existing mortgage has restrictions). A tax attorney or CPA should review any tax consequences.

Conclusion

In North Carolina, a deed is not usually the right place to add payment protections. If the goal is to keep the property in the seller’s name until paid in full, the safer path is a properly drafted contract for deed that meets Chapter 47H’s minimum terms and is recorded within five business days after signing and acknowledgment. If payments stop, the seller must serve a compliant default notice and give at least 30 days to cure before pursuing forfeiture. The next step is to have the documents reviewed and revised into a compliant structure before signing.

Talk to a Real Estate Attorney

If you’re dealing with a family transfer where payments will be made over time and the goal is to stay protected if payments stop, our firm has experienced attorneys who can help evaluate whether a contract for deed or a deed-of-trust structure fits the situation and can help tighten the paperwork and deadlines. 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.