A real estate transaction in Montclair falls through after the seller refuses to release the $8,000 earnest money deposit held in Broker Susan's escrow account. The buyer demands a full refund, but the seller insists the deposit is forfeited. Both parties have submitted written, conflicting demands to Susan. Under New Jersey regulations, what is Susan's proper course of action?
Correct Answer
C) Continue to hold the funds in the trust account and seek a resolution through interpleader or await a written agreement from both parties
Under N.J.A.C. 11:5-2.4, when a broker receives conflicting written demands for trust funds, the broker must not release the funds to either party unilaterally. The broker must continue to hold the funds in the escrow trust account and may seek resolution through interpleader (filing with a court to let the court decide) or wait until both parties provide a written agreement on disbursement. This protects the broker from liability and ensures proper legal resolution of the dispute.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Price fixing is an illegal antitrust practice in which competing real estate brokerages agree to charge the same commission rates, fees, or other pricing for their services. It is a per se violation of the Sherman Antitrust Act.
Florida brokers are required to maintain transaction records and escrow records for a minimum of five years.
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.
More Practice Of Real Estate Questions
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