Robert and Amy enter into a purchase agreement for an Indiana property. The agreement includes an earnest money deposit of $5,000. Robert is an Indiana Broker representing the buyer. Under Indiana law, where must the earnest money be deposited, and by when?
Correct Answer
D) In the managing broker's trust account, promptly upon receipt and no later than as required by IREC rules
Under IC 25-34.1 and IREC regulations, earnest money received by an Indiana Broker must be deposited into the Managing Broker's trust account promptly upon receipt, consistent with IREC rules. The Managing Broker is responsible for maintaining and supervising the trust account. Indiana law requires that client funds not be commingled with the broker's personal or business funds.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
Specific performance is a court-ordered remedy that compels the breaching party to fulfill their obligations under the contract rather than simply paying monetary damages. It is an equitable remedy used when monetary damages would be inadequate.
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