How are utilities and taxes handled between Goldfish Swim School and the franchisee as of the date of possession?
Goldfish_Swim_School Franchise · 2025 FDDAnswer from 2025 FDD Document
All utilities and taxes shall be prorated as of the date of possession.
Taxes shall be deemed to cover the calendar year in which the taxes became a lien.
Taxes that become a lien in years prior to the year of closing shall be paid by Franchisee without proration.
Taxes that become a lien in the year of closing shall be prorated so that the Franchisee shall be charged with taxes from the first of the year to closing date and Goldfish shall be charged with taxes for the balance of the year.
If any bill for taxes proratable under this provision has not yet been issued, the corresponding tax bill for the last previous year shall be substituted therefore and used in proration.
Franchisee shall provide an owner's policy of title insurance without exceptions covering the Real Estate at Franchisee's expense, or at Goldfish's option, a complete abstract showing marketable title, together with a 10-year tax history, tax lien search, and financing statements search, all certified to the date of the transfer of possession to Goldfish, the cost of the abstract to be paid by Franchisee.
Franchisee shall maintain insurance on the Real Estate to the date of closing, with Goldfish becoming responsible for insuring the property beginning with the date of closing.
Source: Item 23 — RECEIPTS (FDD pages 77–389)
What This Means (2025 FDD)
According to the 2025 Goldfish Swim School Franchise Disclosure Document, all utilities and taxes related to the real estate will be prorated between Goldfish Swim School and the franchisee as of the date of possession. This means that both parties will pay their fair share of these expenses based on the portion of the year they owned or occupied the property.
Specifically, taxes are deemed to cover the calendar year in which they become a lien. If taxes become a lien in years prior to the closing year, the franchisee is responsible for paying them without proration. However, if the taxes become a lien in the year of closing, they will be prorated. The franchisee will be charged for the period from the first of the year up to the closing date, while Goldfish Swim School will be responsible for the remainder of the year.
If the actual tax bill for the year of proration hasn't been issued yet, the tax bill from the previous year will be used as a substitute for calculating the prorated amounts. Additionally, the franchisee is required to provide an owner's policy of title insurance at their expense, or at Goldfish Swim School's option, a complete abstract showing marketable title, along with a 10-year tax history, tax lien search, and financing statements search, all certified to the date of the transfer of possession to Goldfish Swim School, the cost of the abstract to be paid by Franchisee.
Finally, the franchisee is responsible for maintaining insurance on the real estate up to the closing date, after which Goldfish Swim School assumes responsibility for insuring the property. This proration of utilities and taxes is a fairly standard practice in real estate transactions, ensuring that both parties only pay for the portion of the year they own or occupy the property. Franchisees should carefully review these provisions and understand their obligations regarding taxes, utilities, and insurance to avoid any unexpected costs or liabilities.