Robert is a licensed Delaware salesperson representing a seller in a residential transaction. At the closing table, the escrow officer calculates the realty transfer tax. Robert's seller client asks who is legally responsible for paying the transfer tax under Delaware law. Which of the following is the most accurate response?
Correct Answer
A) Both the buyer and seller are jointly and severally liable for the transfer tax, but it is conventionally split equally between them.
Under 30 Del. C. § 5401 et seq., both the buyer and the seller are jointly and severally liable for the Delaware realty transfer tax. This means either party could be held responsible for the full amount if the other fails to pay. In practice, the tax is conventionally split equally (50/50) between buyer and seller at closing, but the parties may negotiate a different allocation in the purchase agreement.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Closing costs are the fees and expenses paid by the buyer and seller at the closing of a real estate transaction, beyond the purchase price. They typically range from 2-5% of the purchase price.
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
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