Buyer Martinez defaults on a purchase contract after the inspection period expires. The seller wants to keep the $8,000 earnest money deposit. Both parties signed a contract with a liquidated damages clause. What should the broker do?
Correct Answer
C) Obtain written agreement from both parties or seek FREC guidance
Correct: Even with liquidated damages clauses, brokers must obtain written agreement from both parties or seek FREC guidance for disputed funds. Why not A: Cannot unilaterally release without buyer agreement. Why not B: Buyer defaulted after inspection period, no automatic right to funds. Why not D: Cannot arbitrarily split funds without agreement.
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