A buyer submits an offer on a Duluth home and includes an earnest money check for $5,000 made payable to the listing brokerage. Under Minnesota law (Minn. Stat. Ch. 82), the listing broker must deposit the earnest money into a trust account within how many business days of receiving it?
Correct Answer
B) Three business days of receipt
Under Minn. Stat. § 82.75, a real estate broker who receives earnest money or other trust funds must deposit those funds into a separate trust account within three business days of receipt. This is a specific Minnesota statutory requirement that protects consumer funds and is a commonly tested topic on the state exam.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An inspection contingency gives the buyer the right to have the property professionally inspected within a specified time frame and to negotiate repairs or cancel the contract based on the findings.
Liquidated damages are a predetermined amount of money specified in the contract that the non-breaching party is entitled to receive if the other party breaches. In real estate, the earnest money deposit typically serves as liquidated damages.
Novation is the substitution of a new contract for an existing one, or the replacement of one party with a new party, with the consent of all parties involved. The original party is completely released from all obligations.
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- → A Rhode Island licensee encounters a listing contract is drafted. What should the licensee remember?
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- → A Hawaii licensee is reviewing the commission asks to inspect escrow and trust records. What is the best answer?
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