In Rhode Island, earnest money deposited by a buyer must be held in:
Correct Answer
B) The broker's escrow (trust) account
In Rhode Island, earnest money received by a broker must be deposited into the broker's escrow (trust) account in a timely manner. The broker holds these funds in a fiduciary capacity on behalf of the parties and must not commingle earnest money with personal or business operating funds. Failure to properly handle escrow funds is a serious violation that can result in license suspension or revocation by the Rhode Island Department of Business Regulation.
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Related Topics & Key Terms
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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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- → A Rhode Island licensee encounters a listing contract is drafted. What should the licensee remember?
- → In Rhode Island, a licensee submits a written purchase or lease offer to an owner. Which statement is correct?
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- → Which Rhode Island rule applies when a listing agreement lists property with a multiple listing service?
- → A Rhode Island licensee encounters a listing agreement lets the principal broker retain a portion of deposit money upon buyer default. What should the licensee remember?
- → A Hawaii licensee is reviewing the commission asks to inspect escrow and trust records. What is the best answer?
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- → For the Hawaii salesperson state portion, a licensee secures a party signature on a Hawaii listing or purchase contract. Which statement is correct?
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