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.
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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?
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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?