Definition of "Apportionment"

Katt Watton real estate agent

Written by

Katt Wattonelite badge icon

Coldwell Banker Residential Brokerage

The term apportionment can be easily applied to many contexts. For example, apportionment in insurance is concerned with how the loss is allocated between two or more insurance companies that collaborated to ensure property or asset. However, in the real estate market, when we talk about apportionment, we refer to the allocation of property expenses that are divided between the buyer and seller during a real estate transaction.

What does Apportionment Mean?

As mentioned above, apportionment is the distribution of costs between the buyer and seller, but this is a bit more complex than you might expect. During a real estate transaction, there are several categories of costs that need to be divided. Firstly, there are tax apportionments that require separate tax notices to be generated for each individual based on the timeline of ownership. Rents can also be apportioned for renters who paid in advance and vacated a property before the deadline. 

Basically, the term apportionment comes from French, and the apportionment meaning is the distribution of something in proper shares. Most commonly used in law, apportionment refers to the distribution of benefits, liability. From a strictly legal perspective, the apportionment can be calculated based on time or based on estate.

Apportionment of estate

Based on estate, the apportionment can result from the act of the parties involved or the law’s operation. An evicted renter is required to pay the amount of rent charged for the time spent in the property prior to eviction, which was an act of the party. However, suppose the renter is evicted because of an act by the law as an instance of eminent domain or an act of God. In that case, the situation is reversed, and we have apportionment from the operation of the law.

Apportionment of time

Based on time, the apportionment can be of rent. If sometimes, before the payment of rent, the renter or landlord dies, or any other type of modification in the parties’ positions happens.

What is Apportionment in Real Estate?

The primary type of apportionment encountered by buyers and sellers is the one that affects costs during a real estate transaction. The parties involved in the transaction will usually split the expenses generated by the property during the month in which the real estate transaction occurs. Here we can refer to taxes, maintenance costs, insurance, and so on. The reason for which this is done is to ensure that the property taxes gained by the local government in portion before the closing date, but were not paid, will be covered by the new owner of the property during the transaction in the form of a credit against the price for which they purchased the property.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.


Popular Real Estate Terms

Legal proceeding whereby a person's property is attached and used to pay an obligation. The employer may withhold part of the employee's salary to the court until the debt has been paid. ...

A unilateral contract is a contract where only one part holds responsibility for whatever the document promises. For instance, an insurance contract is usually a unilateral contract ...

The definition of Fair Market Value in the real estate business is the highest amount that could be received on the sale of a property when there are a willing buyer and a willing seller. ...

Bottom of a frame such as a window sill. ...

As the term “servient” comes from the root word “serve” and to serve means to perform a duty or a service for another entity, its meaning is easy to define. The term ...

Platform erected on a roof in some New England homes having a view of the sea. It was said widows of lost seaman would walk on the platform looking out at sea for their husbands to return ...

Having an interest in property for the duration of one's life after which the title reverts to another party. ...

Involves the transfer of property from one individual to another for a consideration in the form of sale. It is the most widely used type of real estate deed with a period of bargaining ...

Interest rate that exceeds the rate on the old loan but in less than the rate on new loans. It is usually offered by the lender to encourage home buyers to refinance existing, low interest ...

Popular Real Estate Questions