Under RELA, a Pennsylvania broker, Peter, holds a buyer's $20,000 earnest money deposit in escrow. Before closing, the buyer's attorney sends a letter demanding that the earnest money be released directly to the buyer because the seller allegedly breached the contract. The seller's attorney sends a conflicting letter demanding the deposit be released to the seller as liquidated damages. Peter has received no court order. What is Peter's MOST legally sound course of action?
Correct Answer
D) Continue holding the funds in escrow pending mutual written agreement of the parties or a court order, and consider filing an interpleader action to resolve the dispute
Under RELA and Pennsylvania trust law, when competing claims exist and no court order has been issued, the broker's safest course is to continue holding the funds in escrow. The broker should seek mutual written agreement or, failing that, file an interpleader action to have the court determine proper distribution. Releasing funds to either party without authorization exposes the broker to liability.
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More Pa Rela Brokerage Rules Questions
Under RELA, a Pennsylvania brokerage must ensure that all licensees affiliated with the brokerage have completed what requirement before practicing real estate?
Under RELA, a Pennsylvania broker of record has a duty to ensure that all affiliated licensees maintain current and active licenses. If the broker discovers that a salesperson's license has expired, what must the broker do?
Under RELA, a Pennsylvania brokerage receives a written complaint from a consumer about one of its salespersons. The broker of record must take what immediate action?
Under RELA, where must a Pennsylvania brokerage display its current real estate license?
Under RELA, a Pennsylvania brokerage employs both salespersons and associate brokers. What is the key difference between a salesperson and an associate broker under RELA?
- → Under RELA, when a Pennsylvania salesperson places their license with a new brokerage, the salesperson is said to be operating under the authority of which individual?
- → Under RELA, a Pennsylvania salesperson, Jake, earns a commission from a closed transaction. How should the commission be paid?
- → Under RELA, a Pennsylvania broker of record must maintain written office policies. Which of the following topics should these policies address?
- → Under RELA, a Pennsylvania broker of record, Sarah, is retiring and wants to close her brokerage. What steps must Sarah take regarding her affiliated salespersons?
- → Under RELA, when a Pennsylvania salesperson terminates their affiliation with a brokerage, what happens to the salesperson's license?
- → Under RELA, a Pennsylvania broker of record, Steve, wants to change the brokerage's physical office location. What must Steve do under RELA?
- → Under RELA, a Pennsylvania salesperson must operate under the supervision of which type of licensee?
- → Under RELA, a Pennsylvania brokerage is required to maintain a physical office location. Which of the following is a requirement for the brokerage office?
- → Under RELA, a Pennsylvania salesperson, Monica, wants to transfer from Brokerage A to Brokerage B. What is required for the transfer to be valid under RELA?
- → Under RELA, how long must a Pennsylvania brokerage retain transaction records?
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Previous Question
Under RELA, a Pennsylvania broker maintains escrow records including a journal and individual client ledgers. During an SREC audit, the auditor requests to see these records. Must the broker make the records available?
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Under RELA, a Pennsylvania broker, Deborah, manages a portfolio of 20 rental properties. She collects rent from tenants on behalf of property owners. Deborah wants to simplify her accounting by depositing all rents into a single escrow account. Is this permissible under RELA?