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responsible for maintenance of the residences until they move
out. Thereafter, the RSC pays for the maintenance costs of the
residences, including the costs of insurance, general property
maintenance, utilities, snow removal, mortgage payments, and
property taxes. However, employees remain legally responsible
for the mortgage payments and taxes. In assigned sales,
employees may elect to deliver possession of the residences
directly to the third-party buyers rather than the RSC. If an
employee delivers possession to the third-party buyer, the
employee remains responsible for the maintenance costs until the
third-party sale closes.
On the day the employees move out of the residences, the RSC
pays them their equity in the residences. The RSC may pay up to
a specified percentage (typically 90 percent) of the equity prior
to the vacate date if an employee needs the money to purchase a
new residence. In such a case, the RSC pays the balance of the
employee's equity on the vacate date. In a regular sale, the
equity payment is the appraised value of the residence as of the
vacate date less the prorated unpaid balances of all loans
secured by the property, prorated accrued interest, prorated real
property taxes, prorated owner's dues, fees, and maintenance
charges, and certain estimated costs of repairs recommended by a
recognized termite or pest control company. In an assigned sale,
the equity payment is computed using the appraised value as of
the estimated closing date for the third-party sales contract.
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Last modified: May 25, 2011