Common Closing Adjustments

 

Below is a list of expenses which are typically adjusted for as of the date of your closing. The intended purpose of the adjustment is to have each party, the buyer and seller, responsible for only his or her portion of the expense related to their period of ownership of the property.

 

 

Condominium Fees: These fees, also known as common interest community fees, are typically assessed by the Owners Association on a monthly basis. A per diem amount is typically calculated and adjusted for based on the date of closing. The monthly fees are generally learned through the resale package which must be provided by the seller to the buyer and is produced by either the property management company for the association or the Owners Association directly. Several other important pieces of information are contained in the resale package and it should be reviewed carefully with your real estate agent and your counsel.

 

 

Real Estate Taxes: These are assessed by the town in which your property is located. They are typically assessed on either a biannual or quarterly basis. Most towns bill their taxes on a current basis. This means that your January tax bill will cover the taxes due on your property from January 1 until June 30. Your July bill will then cover your taxes due from July 1 until December 31. Two towns in Connecticut bill their taxes in arrears. Those two towns are Wallingford and Meriden. This means that in both of those towns the seller will end up giving the buyer a credit for the portion of the real estate taxes the buyer will be billed for representing the seller's ownership of the property which will become due after the date of the closing. In the remainder of the towns, the buyer will be giving the seller a credit for the portion of the real estate taxes the seller has paid for in advance and for which cover a period in time after the closing. This assumes that the seller has in fact paid the taxes as they become due. This will be verified during title search performed on property.

 

 

Heating Oil: During the last couple of days before the closing a reading is usually scheduled with the seller's heating oil provider to determine how much heating oil remains in the storage tank at the property. A credit is given to the seller for the unused gallons of heating oil left at the property which the buyer will be receiving.

 

 

Water and Sewer: If the property is connected to public water and/ or sewer, a meter reading will be scheduled for the last couple of days prior to the closing. Sometimes the town or water company will simply issue you a final statement to the seller for their portion of the water and sewer expenses. Other towns only provide a statement for what the outstanding balance is on the account taking into consideration the final reading. This amount will eventually be billed to the buyer. Consequently, this amount is then adjusted for at closing.

 

 

Beach Associations: If a properties is located in a private beach or lake association or similar type of limited common interest community these association fees would be adjusted for just like a condominium fee would be as of the date of the closing.

 

 

Fire Districts: Some towns have separate fire districts which have their own tax for the properties which are located within them. This information is reported on the title search for the property. The fire district tax would be adjusted for just like a real estate property tax would be. 

 

 

Propane: Propane in a storage tank located at the property may be adjusted for just like heating oil. However, propane on the property also typically has service contracts and agreements with the natural gas provider which must also be taken into account. In some instances the adjustments for the propane being left at the property will be handled between the buyer and the third party service provider.

 

 

WALLINGFORD COMMUNITY BASED LAW FIRM

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