A Missouri residential purchase agreement is being reviewed for compliance with state law. All of the following statements about earnest money handling by a Missouri broker are correct EXCEPT:
Correct Answer
B) The broker may commingle earnest money with personal operating funds if the amount is under $500
Under RSMo § 339.105 and MREC rules, commingling of client funds (including earnest money) with a broker's personal or operating funds is strictly prohibited regardless of the amount involved. There is no exception for amounts under $500 or any other threshold. Commingling is one of the most serious violations under Missouri license law and can result in license revocation. The $500 threshold is a fabricated exception that does not exist in Missouri law.
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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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