If a company wants to take part ownership of my property until I get paid, what risks should I watch out for before I sign anything? – North Carolina

Short Answer

In North Carolina, giving a company “part ownership” of real estate until payment often functions like a financing deal, even if it is labeled as a partnership, option, or temporary transfer. The biggest risks are losing control of the property, creating a cloud on title that blocks refinancing or sale, and giving the company leverage to force a sale or foreclosure-type remedy if a dispute arises. Before signing, the paperwork should clearly say whether the deal is a true ownership transfer or a security arrangement, how and when the company must release its interest, and what happens on default or disagreement.

Understanding the Problem

In North Carolina real estate transactions, can a property owner safely agree to a company taking partial ownership of real property until the company pays money that is owed? Who controls decisions about the property during that period, and what happens if payment is late, disputed, or never made? The key decision point is whether the document creates a real ownership interest (like co-ownership) versus an interest meant only to secure payment (like collateral). That classification drives practical risk, control, and the ability to sell, refinance, or transfer the property while the company’s interest exists.

Apply the Law

North Carolina law generally treats recorded interests in real property seriously: once an interest is conveyed and recorded in the county Register of Deeds, it can affect title and limit what can be done with the property until that interest is released. Some arrangements that sound like “temporary ownership until paid” can also resemble a security interest (similar to a deed of trust or mortgage). When a deal is structured as a security arrangement, the enforcement and transfer rules often follow secured-real-estate principles, including the possibility of a sale remedy on default. Separately, agreements that postpone full transfer of title until payments are made can fall into special rules for contracts for deed in North Carolina, which focus on disclosures and existing liens.

Key Requirements

Clear legal structure: The document should plainly state whether it is (a) a deed conveying an ownership share (such as a tenancy-in-common interest), (b) an option/right to acquire ownership later, or (c) an agreement that pledges the property as security for an obligation.
Defined control and exit terms: The paperwork should spell out who controls possession, maintenance, taxes/insurance, leasing decisions, and how the company’s interest ends (release, reconveyance, cancellation, or buyout) after payment.
Recordation and title impacts addressed: The agreement should address whether it will be recorded, what will be recorded (deed, memorandum of option, deed of trust), and what must be delivered to clear title when payment occurs.

What the Statutes Say

N.C. Gen. Stat. § 47-17.2 (Assignments of deeds of trust and similar security instruments) – Allows enforcement rights to follow the secured note, even if an assignment is not recorded, which can matter if the company sells or transfers its payment rights to someone else.
N.C. Gen. Stat. § 47H-6 (Contract for deed title requirements and disclosures) – Requires certain title conditions and a bold disclosure about existing liens and foreclosure risk in contract-for-deed situations, and provides remedies if the seller violates the requirements.

Analysis

Apply the Rule to the Facts: With no specific facts provided, two common versions of this situation illustrate the main risks. If a company asks for a deed for a percentage interest “until paid,” the deal can create immediate co-ownership, meaning later disagreements can affect control and the ability to sell or refinance. If the company instead uses paperwork that functions like collateral for a payment obligation, a default or dispute can trigger enforcement steps that resemble foreclosure-type remedies, and the company may also be able to transfer its rights to another party.

Process & Timing

Who files: Typically the company (or the closing attorney) records the instrument that creates the company’s interest. Where: The Register of Deeds in the county where the property is located. What: Often a deed (for “part ownership”), a deed of trust (for security), or a recorded memorandum of an option/contract. When: Often immediately after signing or closing; timing can matter because earlier recording can affect priority against later buyers and lenders.
During the “until paid” period, lenders, buyers, and title insurers usually treat the recorded interest as a title issue that must be resolved before refinancing or sale. The practical timeline often depends on how quickly the company will sign and deliver a release or deed back once payment is made.
At the end, the owner typically needs a recorded release or reconveyance document (for example, a deed back or a satisfaction/release of the security instrument) to restore marketable title.

Exceptions & Pitfalls

“Ownership” label versus real effect: A document titled as a joint venture, partnership, or option can still operate like a security arrangement, and the remedy section can give the company leverage that feels like foreclosure or forced sale.
Clouded title and blocked financing: Any recorded ownership share, option memorandum, or security instrument can prevent refinancing, home equity borrowing, or sale until the interest is released, even if payment is only briefly delayed or disputed.
Transfer of the company’s rights: North Carolina statutes allow the right to enforce a deed of trust or similar security interest to follow the secured obligation; if the company sells the note/rights, a different party may enforce the agreement. See N.C. Gen. Stat. § 47-17.2.
Existing liens and contract-for-deed issues: If the arrangement looks like a contract for deed (title held back while payments occur), North Carolina requires special disclosures about existing liens and foreclosure risk, and violations can create rescission/damages remedies. See N.C. Gen. Stat. § 47H-6.
Decision-making and expense allocation gaps: If the contract does not clearly assign taxes, insurance, repairs, casualty losses, and rent/occupancy rights, disputes can arise even if everyone “agrees on the price.”
Unclear exit paperwork: Many problems come from failing to require a specific release document (signed in advance or placed in escrow) and a clear duty to record it promptly once payment is made.

Conclusion

In North Carolina, a company taking “part ownership” until payment can create major title and control risks because it may operate as true co-ownership or as a security arrangement with strong enforcement remedies. The safest approach is a document that clearly defines the legal structure, who controls the property, and exactly how the company’s interest ends. A practical next step is to have a North Carolina real estate attorney review the proposed deed/option/security documents before signing and to require a written release or reconveyance obligation with a short deadline after payment.

Talk to a Real Estate Attorney

If you’re dealing with a proposed deal where a company wants temporary “part ownership” of real property until payment, our firm has experienced attorneys who can help explain the risks, confirm what the documents really do, and map out timelines for clearing title. 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.