Monthly rent of $2,750 was collected in advance by the seller for a 30-day month. Closing occurs on the 15th day of the month, and the seller owns the day of closing. What is the seller's share of the month's rent?
Correct Answer
A) $1,375
Divide the month's rent by the days in the month to get the per diem: $2,750 ÷ 30 = $91.67. The seller owns the day of closing, so the seller's share covers 15 days: 15 × $91.67 = $1,375. Because the seller already collected the whole month in advance, the buyer's 15 days ($1,375) are debited to the seller and credited to the buyer on the settlement statement. The two shares always add back to the full month's rent, which is the fastest check on the day count.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Title insurance is a policy that protects the insured party against financial loss from defects in title that were not discovered during the title search. Unlike other insurance, it covers past events rather than future risks.
A title search is an examination of public records to determine the history of ownership, liens, encumbrances, and other interests affecting a property. It verifies that the seller has the legal right to transfer the property.
A transfer tax is a tax imposed by state, county, or local government on the transfer of real property from one owner to another. It is typically based on the sale price or a flat rate per dollar of consideration.
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