Expense Allocation

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January 1, 1 6 min read Definitions

Proration Real Estate Transactions Expense Allocation Property Taxes Utilities Homeowner Association Fees Closing Costs

Proration refers to the division of expenses or income proportionally based on the time used or the amount consumed between parties in a real estate transaction. This ensures fair allocation of costs such as property taxes, utilities, and homeowner association fees based on the agreed terms.