A broker may release earnest money deposits in all of the following situations EXCEPT:
Correct Answer
C) When the broker determines one party is clearly entitled to the funds
Correct: Brokers cannot unilaterally determine entitlement to disputed earnest money - this requires legal authority or party agreement. Why not A: Written authorization from both parties allows release. Why not B: Court orders must be followed for fund disbursement. Why not D: FREC escrow disbursement orders authorize release.
Why This Is the Correct Answer
Why the Other Options Are Wrong
Deep Analysis of This Real Estate Contracts Question
Background Knowledge for Real Estate Contracts
Real World Application in Real Estate Contracts
Common Mistakes to Avoid on Real Estate Contracts Questions
Related Topics & Key Terms
Key Terms:
Related Concepts
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.
An inspection contingency gives the buyer the right to have the property professionally inspected within a specified time frame and to negotiate repairs or cancel the contract based on the findings.
More Real Estate Contracts Questions
All of the following are required elements of a valid Florida real estate purchase contract EXCEPT:
A seller accepts a buyer's offer on their Florida home but dies before closing. The seller's estate representative wants to cancel the contract. What is the legal status?
The FAR/BAR residential contract requires earnest money held by:
A buyer signs a Florida purchase contract for a condo and learns during the inspection period about a special assessment of $10,000. The seller knew but didn't disclose this. What are the buyer's rights?
A buyer and seller in Florida agree to extend the closing date by 10 days. The original contract had a 'time is of the essence' clause. What must they do to make this extension valid?
- → A Florida real estate licensee prepares a purchase agreement that includes a financing contingency. The buyer fails to apply for financing within the specified timeframe. What is the legal consequence under Florida contract law?
- → Under Florida law, all of the following would typically survive the closing of a real estate purchase agreement EXCEPT:
- → Broker Sarah receives a $5,000 earnest money deposit from buyer Johnson for a property purchase. The contract states the deposit should be held in escrow. According to Florida law, what must Sarah do with this deposit?
- → A buyer in Fort Lauderdale breaches a residential purchase contract by refusing to close without legal justification. The contract contains a liquidated damages clause equal to the earnest money deposit of $5,000. What is the seller's most likely remedy?
- → A seller in Florida fails to deliver clear title by the closing date due to an unexpected lien. The buyer wants to proceed but needs more time. What is the most appropriate course of action?
- → Under Florida law, a real estate purchase contract may be rescinded for all of the following reasons EXCEPT:
- → Under Florida real estate law, all of the following are acceptable remedies for contract breach EXCEPT:
- → In Gainesville, a buyer discovers that the seller's agent failed to disclose a material fact about flooding history. The buyer wants to cancel the contract before closing. Under Florida law, what is the buyer's strongest legal basis?
- → A 17-year-old inherits a property in Florida and wants to sell it. The minor enters into a sales contract with a buyer. Under Florida law, what is the status of this contract?
- → Audit memo Harbor Case highlights this Florida rule. In a Tallahassee transaction, a closing coordinator wants the Florida rule on offer. Which statement is correct?
People Also Study
Buyer Representation Agreement
8% of exam
Property Ownership
10% of exam
Land Use Controls and Regulations
8% of exam
Valuation and Market Analysis
10% of exam
Related Articles
Essential Real Estate Math Formulas You Need to Know
Master the key math formulas for your real estate exam. Covers commission, prorations, area calculations, and more with step-by-step examples.
How to Build a 14-Day Real Estate Exam Review Plan When Time Is Tight
A realistic two-week real estate exam review plan with focused practice, weak-area review, and scheduling guidance.
What to Review in the Last 72 Hours Before the Real Estate Exam Without Cramming Everything Again
Use the final 72 hours before the real estate exam to narrow your review, protect recall, and avoid panic cramming.
Previous Question
Buyer Chen wants to increase her earnest money deposit from $2,000 to $5,000 to strengthen her offer in a multiple offer situation. How should this additional deposit be handled?
Next Question
A buyer in Orlando deposited $5,000 as the initial escrow deposit, but the later additional deposit of $4,000 was never made. The buyer defaulted before paying that second deposit, and the contract permits the seller to retain deposits actually received as liquidated damages. How much may the seller retain?