Which of these is NOT a proper way to resolve a dispute over earnest money the broker holds in trust?
Correct Answer
B) The broker deciding alone which party is entitled to the funds
Disputed trust funds may leave the account on the parties' joint written instructions, on a court order or arbitration award, or through an interpleader in which the holder deposits the money with the court and lets the claimants litigate their rights. What the holder may not do is decide the dispute. Paying one claimant on the broker's own judgment of the merits exposes the broker to a conversion claim and to license discipline, however clear the broker believes the right answer to be.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
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Specific performance in North Dakota:
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