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Buying or Selling a Home/HUD-1 settlement statement


The Florida property concerned is located in a community with a golf course and other amenities which belong to the homeowners. There is a stipulation that all homeowners, also referred to as members, must purchase a minimum of $750 of Food & Beverages during the calendar year. This isn't a prepaid amount, but rather, pay-as-buy. If, of corse, a member doesn't purchase the minimum by the end of the year, they will be invoiced for the difference not spent. The membership is associated to the address, so, the new owner inherits the previous owner's membership number and as a result, the amount yet to be purchased from the club.
My understanding is that line 112, in this case, can be either zero if the seller has purchased at least the prorated minimum,  or shown as a reduction in price if the seller hasn't purchased his share of the minimum.
Ex. if closing is May 1, then the seller must have purchased at least 1/3 of the $750 (or $250) or more in order not to be charged the difference which would be shown as a negative number on the buyer's side of the HUD. If the amount spent is $600 dollars, then, the amount shown on line 112 would be zero. The new owner has only to purchase $150 before the end of the calendar year in order to satisfy the member's minimum obligation. The overage of $350 is the responsibility of the seller. Members are obliged to give a credit card to which these club charges are assigned; therefore, they aren't part of the HUD.
The items appearing in the 100 series of numbers are those that have been prepaid, like HOA fees and taxes. They are prorated and become part of the purchase price. Line 112 as detailed above should not be interpreted to mean that the excess amount spent by the seller is to be included as a prepaid expense. This would be akin to saying that all members that spend, say $1500 in F&B will be reimbursed $750 by the club.
Am I correct?
Thank you for reading me.

Hi Nicholas,

Please forgive my delayed response; I've just returned from vacation to find this in my inbox.

I believe your approach to this matter to be correct.  The minimum Food & Bev purchase could be considered part of the HOA dues, in reality.  The $750 fee should be prorated by 365 days ($2.05/day) and credit/debit given for any balance paid/not paid up to the closing day.

I would think a good title agent or attorney would handle it that way.

Hope this helps!


Kerrin Kostelic
Broker Associate, GRI

Coldwell Banker United, Realtors
Pensacola, Florida
Lic BK696651

Buying or Selling a Home

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Kerrin Kostelic, FL Broker Associate, GRI, AHWD


Let me know if you need help with any of following type questions: How to choose a great agent? Why do I need to hire a Realtor? What does "agency representation" mean in Florida? How does a Realtor get paid? What do I need to do to get my house ready for sale? How important is pricing in getting my home sold? What if I'm under water in my current mortgage? How do I go about getting a loan? Please keep in mind that I cannot give legal nor financial advice as I am not licensed for either of these activities. In addition, real estate law changes from state to state; I am licensed in Florida only so that is specifically my area of expertise. If it is a more general real estate question, feel free to ask away!


I have been a full time real estate licensee in the State of Florida since 2000 and received my brokers license in 2005. I have helped 200+ clients and customers buy and/or sell a home, condo, or vacant property since that time. I continue to educate myself in my field taking numerous courses on financing, negotiating, contracts, Fair housing, construction, all in order to become a better professional.

National Association of Realtors Florida Realtors Pensacola Assn of Realtors Leadership Pensacola class of 2008 Gulf Coast Search and Recovery, K-9 Inc -- volunteer, handler in training, & Secretary/Treasurer

BA in Social Sciences/Language Arts with Elem. Education certification--Univ of Michigan, 1993 Real Estate licensee in FL -- Oct 2000 to present Graduate, Realtor Institute, Nat'l Assn of Realtors -- 2004 Broker Associate, FL -- 2005 At Home with Diversity designation, Nat'l Assn of Realtors -- 2009

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