A Connecticut real estate broker receives a buyer's earnest money deposit in the form of a personal check. The buyer requests that the broker hold the check uncashed until the seller accepts the offer. Under Connecticut law, which of the following is the broker's obligation?
Correct Answer
B) The broker may hold the uncashed check as requested, but must disclose this arrangement to the seller or the seller's agent
Under Connecticut real estate practice and CREC guidance, a broker may accommodate a buyer's request to hold an earnest money check uncashed pending offer acceptance, but this arrangement must be disclosed to the seller or the seller's agent. Failure to disclose that the deposit is being held uncashed could constitute a material misrepresentation to the seller, who may assume the funds are immediately available. The three-banking-day deposit clock begins upon acceptance of the offer.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Antitrust violations in real estate occur when competing brokerages or agents engage in practices that restrain trade, reduce competition, or harm consumers through collusion. These violations are governed by the Sherman Antitrust Act and can result in severe penalties.
Broker supervision is the legal obligation of a designated or managing broker to oversee and be accountable for the real estate activities of all salespersons and associate brokers operating under their license.
Commingling is the illegal act of mixing client funds with a broker's personal or business operating funds, while conversion is the unauthorized use of client funds for the broker's own benefit. Both are serious violations that can result in license revocation.
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