As specialists in mountain property, we often deal with homes that rely on propane. During the sale of a property with propane, it’s important to consider whether the tank is leased and to be transferred, or owned and part of the contract inclusions. Regardless, the contents of the tank need to be addressed from Seller to Buyer, typically as a prepaid utility. Some of the more well-known providers in Northern Colorado include Suburban Propane, Schrader Oil, & Poudre Valley Coop.
Each company has their own policies, so Buyers and Sellers should always check with them first. Prior to closing, all parties should agree on the proration for any leftover propane. The gauge on top of the tank will indicate the percentage of volume left. You would then need to contact your provider to obtain the current costs of propane, and do the math to figure out proration at time of closing, if your provider doesn’t do a reading. An additional provision should be added to the contract so that all parties are clear on how the process for propane proration will be conducted. The title company should also be made aware of the numbers, and add the proration as a line item on the settlement statements prior to closing. For the smoothest transition to closing, be sure all parties understand that propane is a PREPAID UTILITY!