Short Answer

In North Carolina, get these items into the written, signed mediation agreement before you leave the session and, if possible, have the Clerk enter it as a consent order in your pending partition case. Spell out the dollar amounts or a clear formula for rental-income credits and tax-fee reimbursement, define the time period and documents used, and set payment and enforcement terms (offsets to buyout price, escrow holdbacks, or a consent judgment on default).

Understanding the Problem

You’re mediating a buyout in a North Carolina partition action. You co-own rental properties with your sibling (who owns a larger share). You want the settlement to reimburse your lost rental income and your tax attorney’s fees tied to being listed as a “partner” without consent. The key is making those reimbursements part of the signed mediation agreement and enforceable in the partition case before the Clerk of Superior Court.

Apply the Law

North Carolina partition cases are special proceedings before the Clerk of Superior Court. Parties may resolve all claims by agreement, and the Clerk can approve settlements in matters within the Clerk’s jurisdiction. Mediated settlements must be reduced to writing and signed to be enforceable, and best practice is to sign before leaving mediation. Your agreement can account for co-tenant rental issues by setting credits, offsets, and payment terms, and it can include tax indemnity and fee reimbursement by consent.

Key Requirements

• Put it in writing and sign at mediation: A mediated agreement must be written and signed by the parties to be enforceable; aim to sign before anyone leaves the session.
• Define the reimbursement scope: State the exact period for lost rent, the calculation method (e.g., market rent or collected rent), and attach a schedule and backup (rent rolls, bank statements).
• State tax-fee reimbursement clearly: Identify the tax issue, list the invoices/amounts or a cap, and set who pays, when, and how (lump sum, escrow, or offset to price).
• Integrate with the buyout: Show how credits reduce the buyout price or require separate payment; include closing mechanics, deed delivery, and release language.
• Add tax indemnity and cooperation: Include hold-harmless, agree to amend/withdraw any partnership filings, and require reasonable cooperation with tax authorities.
• Make it enforceable in the case: Ask the Clerk to enter a consent order in the partition file or provide for a consent judgment/escrow if there’s a default.

What the Statutes Say

• N.C. Gen. Stat. § 7A-38.3B (Mediation before the Clerk) – Authorizes mediation in matters before the Clerk and ties procedure to court-approved mediation rules.
• N.C. Gen. Stat. § 7A-38.1 (Mediated settlement conferences) – Requires settlements reached in mediated conferences to be reduced to writing and signed to be enforceable.
• N.C. Gen. Stat. ch. 46A (Partition of real property) – Governs partition proceedings, commissioners, and sales; related accounting and adjustments can be resolved by consent.

Analysis

Apply the Rule to the Facts: Because your partition case is pending before the Clerk, you can settle reimbursement issues as part of the mediated buyout. To capture lost rental income, specify the dates (for example, from the first missed distribution to closing), the rate or formula, and attach your rent ledger. For tax attorney fees tied to the unauthorized “partner” listing, list invoices, set a cap or audit process, and include an indemnity for any resulting tax liabilities.

Process & Timing

1. Who files: Either party (typically your attorney). Where: Clerk of Superior Court in the county where the properties are located (the partition special proceeding). What: A joint motion to approve settlement and proposed consent order incorporating the signed mediated agreement; attach schedules for rent credits and fee invoices. When: Sign the agreement at the end of mediation; submit the consent order promptly in the partition file.
2. Set the buyout closing mechanics in the agreement: payment method, closing date, deed form, lien or escrow to secure any post-closing true-up (e.g., tax adjustments), and dismissal terms to file once payment clears.
3. On approval, expect an entered consent order or memorandum of judgment that makes the settlement enforceable in the partition proceeding; if payment fails, the order can permit entry of a consent judgment or resumption of sale.

Exceptions & Pitfalls

• Vague terms: If you do not define the rental period, rate, and documents, you invite disputes and weaken enforcement.
• Fee shifting limits: Courts rarely award attorney fees without statutory authority; include express, mutual fee and cost provisions as settlement terms.
• Enforcement gaps: If you don’t incorporate the agreement into a consent order or provide for a consent judgment/escrow, you may have to start a new lawsuit to enforce.
• Tax exposure not closed: Omit indemnity or cooperation clauses and you risk later tax assessments falling back on you.
• Entity/title mismatch: If properties are held in an LLC, ensure the entity is party to the agreement and signs transfer and indemnity documents.

Talk to a Partition Action Attorney

If you’re dealing with a co-owned rental portfolio and need a buyout agreement that pays you back for lost rents and tax-related fees, 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.