Colorado Broker Practice Test

At closing, taxes for special assessments are charged to which party if paid off at closing?

Buyer Seller Lender Escrow Agent

Correct Answer:

Seller

Explanation:

Special assessments are charges tied to the property for local improvements and create a lien that stays with the property until paid. At closing, any unpaid special assessments are settled as part of the transfer. If the seller pays off the remaining balance to clear the lien at closing, the seller is the one who incurs that cost on the settlement statement. The buyer, in turn, is credited for the payoff so the title transfers free of that encumbrance. In typical practice, the obligation to satisfy pre-existing liens like special assessments rests with the seller because they owned the property when the assessment was levied, unless the purchase agreement specifies otherwise.

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