A Jacksonville property closes on September 22nd. The homeowner's insurance premium of $1,200 runs from August 1st through July 31st of the following year. The buyer will assume the policy. Using the 30-day month (banker's) method and treating the day of closing as belonging to the buyer, what is the insurance proration amount and who receives the credit?
Correct Answer
A) Seller receives a $1,026.67 credit from the buyer
Seller prepaid 12 months. Days used by seller (8/1 through 9/21 under 30-day method) = 52 days; days remaining for buyer = 360 − 52 = 308 days. Unused portion = $1,200 × 308/360 = $1,026.67, which the buyer reimburses (credits) to the seller.
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A Tampa Bay condominium sale is scheduled to close on March 10th. The monthly maintenance fee of $450 was paid by the seller for the entire month of March. According to Florida real estate practice, how should this prepaid maintenance fee be handled at closing?
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In Florida real estate closings, all of the following items are typically prorated between buyer and seller EXCEPT: