The first of these appears usually in the paragraph setting the closing date. It is customary to arrange as far as possible for the seller's interest to cease and the purchaser's commence on the day the title is closed and the deed delivered. Hence the provision "rents" and interest on mortgages and fire insurance premiums, if any, are to be apportioned. Under this stipulation while the seller may have collected rents covering a period extending beyond the date of transfer, he must pay or allow to the purchaser the fair proportion of the rents which will be earned after the transfer. So, too, the interest on the existing mortgage, if there be one, has been accruing since the last interest date, and on the next interest date the amount of interest for the full period will be payable. The seller allows to the purchaser the fair proportion of the interest which has accumulated up to the date of closing title. Fire insurance policies are paid for in advance for a period of usually several years. Of course the seller might cancel his policies and the purchaser secure new ones. But the surrender value is less than the proportion of the premium for the remaining period, hence the seller usually seeks to have the purchaser take over the present policies and pay the seller the proportion of the premium for the time remaining till expiration.

The contract may, if agreed upon, provide for adjustment of other items. Of these, the most common are land taxes. Land taxes are levied for a certain definite period, and depending upon the law of the place where the property is located, may be payable at the beginning of the period, during it or at its expiration. In some States, the law provides that taxes shall be adjusted unless the contract specifically provides to the contrary. In New York City and many other places the reverse is true; unless the contract directs an adjustment, the seller shall pay all taxes due prior to the date of closing title. For example: In New York taxes are levied for the calendar year; one-half payable May 1st and one-half November 1st. Suppose title is set to close June 1st. If the contract make no mention of adjustment of taxes, the seller must pay the half due May 1st, although that covers the period to July 1st. If the contract provides for adjustment of taxes, the purchaser would have to pay the month of June, or one-sixth of the amount due May 1st. In New York City it is now becoming customary to provide for adjustment of taxes, particularly in cases where valuable properties are concerned.