What is proration?
Proration describes how some costs, such as property taxes, will be divided between the buyer and seller. For example, if the seller has paid property taxes for the year, but the buyer will occupy the property for the last three months of the tax year, the buyer will “refund” three month’s worth of property taxes to the seller. This refund, or “prorated” amount, will be detailed in the proration agreement.
Other fees, such as homeowner’s association fees, including special assessments, may also be detailed in the proration agreement.

[Back]