Real Estate Settlement & Closing
HOA Dues Proration Calculator
To prorate HOA dues at closing, divide the dues by cycle days and allocate days owned to seller and buyer. For a $300 monthly fee closing on the 10th day, the seller owes $100 and the buyer owes $200. If prepaid by the seller, the buyer credits the seller $200.
Determine exact seller and buyer credits for monthly, quarterly, or annual homeowners association fees at property closing.
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Interactive HOA Dues Proration Calculator
How HOA Prorations Work in Real Estate Closings
When a residential property in a condominium, planned unit development (PUD), or homeowners association is sold, recurring association assessments must be apportioned between the buyer and seller based on their exact dates of title ownership.
The escrow agent, settlement attorney, or title company calculates the daily assessment rate by dividing the regular periodic fee by the total days in the cycle. The seller is charged for the days they held title, while the buyer assumes financial responsibility for the remaining period.
For accompanying real estate tax adjustments, use our dedicated property tax proration calculator. For lease prorations, consult our prorate calculator.
Worked Real Estate Settlement Example
Scenario: April Closing with Prepaid Monthly Dues
A condominium sale closes on April 12. Monthly HOA dues are $360.00, which the seller paid in full on April 1. Under local contract custom, the seller owns the property through closing day (12 days), and the buyer owns from April 13 through April 30 (18 days).
- Days in April: 30 days
- Daily HOA rate:
$360.00 ÷ 30 = $12.00 / day - Seller's share (April 1–12):
12 days × $12.00 = $144.00 - Buyer's share (April 13–30):
18 days × $12.00 = $216.00 - Closing Settlement Entry: Buyer credits Seller $216.00
Prepaid HOA Dues vs Dues in Arrears
Paid in Advance (Standard)
Nearly all HOAs require assessments to be paid on the 1st of the month or quarter. Because the seller has already disbursed the full payment, the seller receives a credit from the buyer at closing for the unused days.
Paid in Arrears
If an association bills after the period concludes, the buyer will eventually pay the entire bill. Therefore, the seller must provide a credit to the buyer at closing to cover the seller's days of ownership.
Frequently Asked Questions
Who pays the HOA dues on the day of closing?
In standard real estate purchase contracts, the seller typically pays HOA dues up to and including the day of closing, or the seller pays through the day prior to closing depending on local custom. The buyer becomes responsible for HOA assessments starting either on closing day or the day immediately following.
How does the closing credit work if the seller already paid the HOA dues?
If the seller prepaid the full month or quarter's HOA dues in advance, the buyer credits the seller on the closing settlement statement for the days remaining in the billing period that the buyer will own the property.
How are quarterly and annual HOA fees prorated?
Quarterly or annual dues are divided by the exact number of calendar days in that specific quarter or year (typically 90 to 92 days for a quarter, or 365 days for a year) to establish a daily rate, which is then multiplied by each party's days of ownership.
Are special HOA assessments prorated at closing?
Special assessments are negotiated in the purchase agreement. Generally, if an assessment was levied before closing, standard contracts require the seller to pay it in full, while assessments levied after closing are the buyer's responsibility, unless mutually agreed otherwise.
How does the escrow officer or closing attorney verify HOA fees?
The settlement agent orders an official HOA Estoppel Certificate or Resale Certificate directly from the homeowners association or management company, which certifies current dues, paid-through dates, outstanding violations, and transfer fees.