Salesperson Raj receives a $10,000 earnest money check from a buyer on a Friday afternoon. His employing broker's office is closed until Monday. Raj holds the check in his desk drawer over the weekend and delivers it to the broker on Monday morning. The broker deposits it into the trust account that same Monday. Under Michigan law, which of the following is most accurate regarding Raj's conduct?
Correct Answer
D) Raj's conduct may be acceptable if holding the check over the weekend was the earliest reasonably practicable opportunity to deliver it to the broker
Under LARA-BPL rules implementing Act 299 of 1980, earnest money must be deposited into the broker's trust account as soon as practicably possible. When the broker's office is closed and the salesperson has no access to deposit the funds, holding a check (not cash) securely until the next business day when the office reopens is generally considered acceptable if it represents the earliest practicable opportunity. The key standard is 'reasonably practicable,' not an absolute deadline that ignores practical circumstances.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A tie-in arrangement is an illegal antitrust practice in which a seller conditions the purchase of one product or service on the buyer's agreement to purchase a separate product or service.
A trust account, also called an escrow account, is a separate bank account maintained by a broker to hold funds belonging to others, such as earnest money deposits, security deposits, or other client funds.
Advertising regulations govern how real estate licensees may market properties and services, requiring truthful, non-deceptive advertising that includes proper identification of the brokerage.
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