Under Ohio law, a broker may release earnest money from the trust account under various circumstances. In which of the following situations may the broker NOT release the earnest money?
Correct Answer
B) The broker personally believes one party is entitled to the funds based on the contract terms
A broker's personal belief about who is entitled to the funds is not a legal basis for releasing earnest money in Ohio. The broker must have proper authorization — either a mutual written release from both parties, a court order, or clear contractual provisions — before disbursing trust 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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Lucy, an Ohio buyer, asks her agent about the statute of limitations for breach of a written real estate purchase agreement. Under Ohio law, how long does the buyer have to file a breach of contract lawsuit?
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- → Grace, a buyer in Ohio, wants to know the difference between rescission and breach of contract. Under Ohio law, what is rescission?
- → Allen, an Ohio buyer, believes the seller's agent made negligent misrepresentations about the property's condition during the sale. Under Ohio law, who may Allen pursue for damages?
- → Oliver, an Ohio buyer, wants to understand the concept of 'mutual rescission' in the context of his purchase agreement. Under Ohio law, what is mutual rescission?
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- → Tom, an Ohio buyer, refuses to close on a property after all contingencies have been satisfied and all deadlines have passed. Under Ohio contract law, what type of action has Tom committed?
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- → Martha, an Ohio seller, provides a warranty deed to the buyer at closing. After closing, the buyer discovers an existing lien that was not disclosed. Under Ohio deed warranty law, what remedy does the buyer have?
- → Keith, an Ohio buyer, defaults on a purchase agreement. The seller does not have a liquidated damages clause in the contract. Under Ohio law, what must the seller prove to recover damages?
- → Jill, an Ohio buyer, wants to know whether punitive damages are available in a breach of contract case. Under Ohio law, which statement is correct?
- → Eva, an Ohio buyer, sues the seller for breach of the purchase agreement and wins a judgment of $25,000. The seller refuses to pay. Under Ohio law, what enforcement options does Eva have?