Contracts
The TREC contract's 'prorations' paragraph specifies how ongoing costs are allocated between buyer and seller. If taxes are prorated to the date of closing and closing occurs October 31, the seller is responsible for how many months of taxes?
A2 months (November and December)
B10 months (January through October)✓ Correct
C12 months (the full year)
D6 months (May through October)
Explanation
If taxes are prorated to the closing date and closing is October 31, the seller is responsible for January 1 through October 31—10 months of the year's taxes. The buyer would be responsible for November and December (2 months). In Texas, taxes are often prorated to the day of closing.
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