Understanding the Problem
When two or more people own real property together in North Carolina, their rights depend on the form of ownership shown in the deed. A co-owner may be able to transfer an individual share, but a buyer of that share becomes a co-owner rather than acquiring the entire property. If the owners cannot agree on the property’s use, division, or sale, a partition proceeding may provide a legal path to separate their interests.
Apply the Law
Key Requirements
Under a tenancy in common, each co-owner holds an undivided share of the whole property. A co-owner may sell, gift, or mortgage that share without the other co-owners’ approval, but cannot transfer more than that co-owner owns. The buyer acquires only that share and steps into the seller’s position as a tenant in common.
A joint tenancy with right of survivorship must be created by language expressing that intent. A joint tenant may transfer that owner’s interest, and the transfer generally ends the joint tenancy as to that share. If there are more than two joint tenants, the remaining owners continue as joint tenants with right of survivorship among themselves while holding the transferred share with the buyer as tenants in common.
What the Statutes Say
N.C. Gen. Stat. § 41-71 provides that a conveyance to multiple owners creates a tenancy in common unless the instrument creates a joint tenancy with right of survivorship or the law creates a tenancy by the entirety. N.C. Gen. Stat. § 41-73 addresses termination of a joint tenancy when one joint tenant conveys an interest or files a partition petition.
For spouses holding property as tenants by the entirety, N.C. Gen. Stat. § 41-58 generally requires the written joinder of both spouses to sell, mortgage, transfer, convey, or otherwise encumber the property.
Partition actions are governed by N.C. Gen. Stat. Chapter 46A. Under N.C. Gen. Stat. § 46A-21, a tenant in common or joint tenant may petition in superior court to partition real property and must join and serve all other cotenants.
Analysis
Process & Timing
Under N.C. Gen. Stat. § 46A-20, the proceeding begins in a county where the property is located. The petition identifies the property and ownership interests, and all cotenants must be joined and served.
If the court orders an actual partition, it appoints three disinterested commissioners to apportion the property under N.C. Gen. Stat. § 46A-50. Their report generally must be filed within 90 days after the last commissioner receives notice of appointment, subject to a possible extension, and must describe the parcels and shares apportioned. Parties have 10 days after service to object before confirmation under N.C. Gen. Stat. § 46A-55 and N.C. Gen. Stat. § 46A-56.
If the court orders a partition sale, the sale follows the procedures described in N.C. Gen. Stat. § 46A-76. After the sale is confirmed and becomes final, the court secures each cotenant’s ratable share of the proceeds under N.C. Gen. Stat. § 46A-85, subject to approved costs and adjustments.
Exceptions & Pitfalls
A sale is not automatic merely because one owner requests it. For an ordinary sale in lieu of actual partition, N.C. Gen. Stat. § 46A-75, subject to statutory exceptions, requires the party seeking a sale to prove by a preponderance of the evidence that actual partition cannot be made without substantial injury to a party. The court must consider evidence supporting both actual partition and sale and make specific findings if it orders a sale.
The substantial-injury standard is not universal. Under N.C. Gen. Stat. § 46A-81, oil, gas, or mineral interests may be sold when a sale is in the cotenants’ best interest or actual partition would cause injury to some or all cotenants. Under N.C. Gen. Stat. § 46A-82, property required for public purposes may be sold when the statutory requirements are met and the cotenants’ interests would be promoted by the sale.
Other pitfalls include overlooking a tenancy-by-the-entirety deed, failing to join every cotenant, ignoring liens or disputed ownership percentages, or assuming that the buyer of one owner’s share acquires the whole property. Joint tenants also may have an agreement requiring notice before one owner terminates the joint tenancy.
Conclusion
North Carolina generally lets a tenant in common or joint tenant sell only that owner’s undivided interest without the other owners’ consent; selling the entire property requires all owners’ authority or a court-ordered sale. For an ordinary partition sale, the key threshold is substantial injury from physical partition, but different standards govern certain mineral interests and property required for public purposes. Spouses holding title by the entirety generally must act together. Review the deed and ownership interests before transferring a share or filing a partition petition.
Talk to a Probate Attorney
Contact Pierce Law Group at [email protected] or (919) 341-7055 for a free case evaluation about a North Carolina co-ownership dispute or partition proceeding.
