Under the TREC contract, Paragraph 13 addresses prorations. Property taxes in Texas are typically paid in arrears. What does 'in arrears' mean for proration purposes?
Correct Answer
D) Taxes are paid after the period they cover, meaning current year taxes are paid at the end of the year or later
In Texas, property taxes are paid in arrears, meaning they are paid after the tax period they cover. Current year taxes are typically due by January 31 of the following year. At closing, the seller's share of unpaid taxes is credited to the buyer.
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Related Concepts
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
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