Under Minnesota law, a broker who receives earnest money in connection with a purchase agreement must deposit those funds into a trust account. When must the broker deposit the earnest money?
Correct Answer
A) Within 3 business days of receiving the earnest money
Under Minn. Stat. Ch. 82 and Minnesota Department of Commerce rules, a broker must deposit earnest money received in connection with a real estate transaction into a trust account within three business days of receipt. This requirement ensures that client funds are protected and properly segregated from the broker's operating funds.
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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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