Marcus, a licensed Michigan real estate salesperson, is working with a buyer client on a residential purchase agreement. His broker has instructed him on proper handling of earnest money deposits received in connection with purchase agreements. Which of the following is NOT a requirement imposed on the broker under Michigan law regarding earnest money received from a buyer?
Correct Answer
D) The broker must obtain written permission from both buyer and seller before releasing earnest money to either party
Michigan law does not require the broker to obtain written permission from both the buyer and seller before releasing earnest money in all circumstances. While disputed earnest money may require mutual agreement or legal process, there is no blanket statutory requirement under the Michigan Occupational Code (MCL 339.2512) that both parties must provide written permission in every release scenario. The broker may release funds pursuant to the terms of the purchase agreement or a court order without needing a separate dual-written-consent document.
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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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