Under the TREC One to Four Family Residential Contract, Paragraph 13 addresses prorations. Which items are typically prorated at closing?
Correct Answer
A) Property taxes, HOA assessments, and maintenance fees based on the closing date
Paragraph 13 provides for the proration of property taxes, interest, maintenance fees, assessments, and rents at closing. These expenses are divided between the buyer and seller based on their respective periods of ownership.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Liquidated damages are a predetermined amount of money specified in the contract that the non-breaching party is entitled to receive if the other party breaches. In real estate, the earnest money deposit typically serves as liquidated damages.
Novation is the substitution of a new contract for an existing one, or the replacement of one party with a new party, with the consent of all parties involved. The original party is completely released from all obligations.
Offer and acceptance is the process by which one party proposes specific terms for a contract and the other party agrees to those exact terms, creating mutual assent. This mutual agreement, also called a meeting of the minds, is an essential element of every valid contract.
More Promulgated Contract Forms Questions
Under the TREC contract, all of the following contract terms may be changed through a TREC Amendment EXCEPT:
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Agent Rivera is completing Paragraph 4 of the TREC One to Four Family Residential Contract, which addresses the license holder disclosure. Agent Rivera is the listing agent. What information must be disclosed in this paragraph?
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A buyer in Texas signs the TREC One to Four Family Residential Contract with a 10-day option period. On Day 8, the buyer's inspector discovers significant termite damage. The buyer wants to request repairs rather than terminate. Under the contract, the buyer should: