Broker Linda receives a $15,000 earnest money deposit from a buyer in connection with the purchase of a Fairbanks property. The transaction falls through and both the buyer and seller submit conflicting written claims to the earnest money. Linda cannot resolve the dispute and holds the funds in her trust account for an extended period. Under Alaska law, which of the following correctly describes Linda's obligations regarding the disputed funds?
Correct Answer
D) Linda must continue holding the funds in trust and, if the funds remain unclaimed after the applicable period, must report and remit them to the State of Alaska under the Uniform Disposition of Unclaimed Property Act, AS 34.45.
Under 12 AAC 64, a broker holding disputed earnest money must maintain the funds in a properly designated trust account and may not disburse them without a court order or written agreement from all parties. Additionally, Alaska's Uniform Disposition of Unclaimed Property Act (AS 34.45) requires that funds held in trust accounts that remain unclaimed after the applicable statutory period must be reported and remitted (escheated) to the State of Alaska. Linda cannot simply hold the funds forever — she has an affirmative obligation under AS 34.45 to eventually escheat unclaimed trust funds to the state.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The National Do Not Call Registry is a federal program administered by the FTC that allows consumers to opt out of receiving unsolicited telemarketing calls, including calls from real estate agents soliciting business.
Brokers in Florida have strict responsibilities for managing escrow accounts, including monthly reconciliation and proper handling of trust funds.
FREC has the authority to impose fines and other disciplinary actions on licensees who violate real estate laws and rules.
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