A buyer in New Haven, Connecticut submits a written purchase offer that includes an earnest money deposit of $10,000. The seller accepts the offer in writing and the contract is fully executed. Under Connecticut law, where must the earnest money deposit be held?
Correct Answer
B) In the listing broker's escrow or trust account
Under CGS § 20-324e and Connecticut Real Estate Commission regulations, earnest money deposits received by a real estate broker must be deposited into the broker's escrow or trust account. The listing broker is responsible for safeguarding client funds, and holding deposits in a properly maintained trust account is a fundamental fiduciary and statutory obligation in Connecticut.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
A financing contingency makes the purchase contract conditional upon the buyer obtaining mortgage approval within a specified time period. If the buyer cannot secure financing, they can cancel the contract and receive their earnest money back.
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- → A Rhode Island licensee encounters a listing contract is drafted. What should the licensee remember?
- → In Rhode Island, a licensee submits a written purchase or lease offer to an owner. Which statement is correct?
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- → Which Rhode Island rule applies when a listing agreement lists property with a multiple listing service?
- → A Rhode Island licensee encounters a listing agreement lets the principal broker retain a portion of deposit money upon buyer default. What should the licensee remember?
- → A Hawaii licensee is reviewing the commission asks to inspect escrow and trust records. What is the best answer?
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