A Maine designated broker receives a written demand from a buyer and seller who are both clients of the same brokerage, each claiming they are entitled to the earnest money deposit held in the trust account following a failed transaction. The broker is uncertain which party is legally entitled to the funds. Under the Maine Real Estate Brokerage Act, what is the designated broker's most appropriate course of action?
Correct Answer
D) Retain the funds in the trust account and seek a written agreement from both parties or pursue interpleader action to have a court determine the rightful recipient
Under 32 M.R.S. § 13162 and MREC guidance, when there is a good-faith dispute over trust account funds, the designated broker must retain the funds in the trust account and not disburse to either party without authorization. The appropriate resolution is either a written agreement signed by all parties authorizing disbursement, or filing an interpleader action in court to have a judge determine the rightful recipient. This protects the broker from liability and ensures proper handling of disputed funds.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
The National Do Not Call Registry is a federal program administered by the FTC that allows consumers to opt out of receiving unsolicited telemarketing calls, including calls from real estate agents soliciting business.
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