Key Takeaways
- North Carolina recognizes tenancy in common, joint tenancy with right of survivorship, and tenancy by the entirety
- Tenancy by the entirety is available only to married couples and provides creditor protection
- NC is an equitable distribution state for divorce (not community property)
- Homestead exemption in NC protects up to $35,000 of equity from creditors
- NC uses both lien theory and title theory for mortgages (technically title theory state)
North Carolina Property Rights and Ownership
Important: This content covers North Carolina-specific property law. You should complete the National Real Estate Exam Prep first, as general property concepts are tested on the national portion.
North Carolina follows common law principles for property ownership.
Types of Property Ownership
Individual Ownership (Tenancy in Severalty)
One person holds title:
- Full control over property
- No survivorship rights
- Property passes through estate
Co-Ownership Types
| Type | Key Features |
|---|---|
| Tenancy in Common | Default, unequal shares OK, no survivorship |
| Joint Tenancy (JTWROS) | Equal shares, right of survivorship, requires express language |
| Tenancy by the Entirety | Married couples only, survivorship, creditor protection |
Joint Tenancy with Right of Survivorship (JTWROS)
In North Carolina:
- Must expressly state "with right of survivorship"
- Requires the four unities (time, title, interest, possession)
- Survivorship rights pass outside probate
- If one owner sells, joint tenancy is severed
Default Rule: Without survivorship language, co-ownership defaults to tenancy in common.
Tenancy by the Entirety
Available only to married couples:
- Both spouses must join in any conveyance
- Strong creditor protection (individual creditors cannot reach)
- Automatic right of survivorship
- Divorce converts to tenancy in common
Marital Property Rights
Equitable Distribution State
North Carolina is an equitable distribution state:
| Feature | NC Rule |
|---|---|
| Division method | Equitable (fair, not necessarily equal) |
| Court discretion | Yes, based on multiple factors |
| Separate property | Generally remains separate |
| Marital property | Subject to equitable division |
Homestead Exemption
North Carolina provides a homestead exemption protecting equity from creditors:
NC Homestead Details
| Feature | Amount |
|---|---|
| Individual exemption | $35,000 |
| Married couple (both 65+) | $60,000 |
| Protection | From forced sale by creditors |
| Applies to | Primary residence |
Note: Homestead exemption protects from general creditors but NOT from mortgage foreclosure.
Mortgages in North Carolina
Title Theory State
North Carolina is technically a title theory state:
- Legal title passes to lender with mortgage
- Borrower holds equitable title
- Title returns to borrower when loan is paid
Foreclosure
| Type | Description |
|---|---|
| Primary method | Power of sale (non-judicial) |
| Timeline | Relatively quick (2-3 months) |
| Deficiency judgments | Permitted |
| Right of redemption | Limited (pre-sale only) |
Easements and Encumbrances
Easement Types in NC
| Type | Creation |
|---|---|
| Express | Written agreement |
| Implied | By necessity or prior use |
| Prescriptive | 20 years adverse use |
| By necessity | Landlocked parcel access |
Prescriptive Easement
To establish prescriptive easement in NC:
- 20 years continuous use
- Open and notorious
- Adverse (without permission)
- Actual and continuous
Adverse Possession
NC requires 20 years of continuous adverse possession:
- Actual possession
- Open and notorious
- Exclusive
- Hostile (without permission)
- Continuous
Color of Title: If claimant has color of title (defective deed), period may be reduced to 7 years with taxes paid.
In North Carolina, what type of property ownership provides creditor protection for married couples?
How long is the period for prescriptive easement in North Carolina?