Broker Carla receives a buyer's earnest money in the form of a personal check for $12,000. The buyer instructs Carla not to cash the check until after the seller has accepted the offer. The offer is accepted three days later. Under Maryland trust account regulations, which of the following best describes Carla's obligation?
Correct Answer
B) Carla may honor the buyer's instructions and deposit the check within one business day of contract acceptance
Maryland regulations under COMAR 09.11.03.04 permit a broker to hold an earnest money check uncashed when the parties have specifically agreed in writing (or the contract so provides) that the check will not be deposited until contract acceptance. In this scenario, the buyer's instruction not to deposit until acceptance is a recognized exception to the standard one-business-day rule. Once the contract is accepted, Carla must deposit the check within one business day of that acceptance.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Commingling is the illegal act of mixing client funds with a broker's personal or business operating funds, while conversion is the unauthorized use of client funds for the broker's own benefit. Both are serious violations that can result in license revocation.
Commingling is the illegal act of mixing client trust funds with a broker's personal or business operating funds; conversion is the misappropriation of those funds.
Continuing education (CE) refers to the ongoing coursework that licensed real estate professionals must complete during each renewal cycle to maintain an active license. CE ensures agents stay current with changes in laws, regulations, and industry practices.
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