Definition
For rental properties, if the tenant has paid monthly rent in advance, you reimburse the seller at closing for the portion of rent covering days after you own it. It's similar to property tax proration.
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For investment properties with tenants, rent prorations ensure the seller doesn't receive rent for days the buyer owned the property. If the seller collected a month's rent in advance, the buyer is typically credited for their portion. If rent is due after closing, the seller may owe the buyer for their portion of the collected rent.
Pro Tip
As a seller, clearly communicate rent collection to the buyer. Provide evidence of rent payments.
Example
A rental property closes on April 15 with monthly rent of $1,500. The tenant paid rent for all of April upfront. The buyer is entitled to $1,129 in rent (16 days from April 15-30): ($1,500 ÷ 30) × 16 = $800. The seller credits this to the buyer.