By Lydia Blair
Special Contributor

At closing, some items, like real estate taxes, are divided up between the buyers and sellers so that each party pays their share of the expenses. This is called proration. The amount each party pays is based on the number of days in the year (or month) that they own the property. It is only fair that you are charged ownership fees and taxes just for the time you own the property.

The title agency is typically responsible for dividing these kinds of expenses proportionally based on a unit of time. For annual property taxes, we divide the tax amount by 365 days to obtain the cost per day. We then multiply the cost per day by the days the seller owned the home and the days the buyer will own the home. Each party is responsible for their prorated amount.

If the taxes for that year have not been paid, the seller is charged for their share and it is credited to the buyer to pay the total bill. If the seller has already paid the taxes for that year, the buyer is charged for their share and it is credited to the seller at closing.

Of course, property taxes aren’t the only fees that are prorated …

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When a condo is first built and still controlled by the developer, HOA dues are kept low to not scare off buyers. Once the developer is gone, those payments have to be reassessed to ensure they meet the needs of the ongoing repair and maintenance of the building. (Hint, they’re not.) The Mayfair, neighboring Lee Oak Lawn Park, is 18 years old, and like all buildings, various maintenance requirements need to be met. 

Soon after the Mayfair gained independence, they began conducting reserve studies that detailed the condition  of their infrastructure, its life expectancy, and estimated costs to repair or replace.  As you know, I’m big on HOAs doing reserve studies to avoid surprises that typically equate to a special assessment and/or the sudden failure of a critical element of a building (That noise you heard? Surprise! The A/C will be out for the month of August).

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