Under TREC rules, a broker receives a promissory note as earnest money instead of cash or a check. Under TREC rules, what must the broker do?
Correct Answer
A) Disclose to all parties that the earnest money is in the form of a promissory note rather than cash, as the contract typically specifies the form
Under TREC rules and promulgated forms, if earnest money is in a form other than cash (such as a promissory note), this must be disclosed to all parties. The contract typically specifies the form of earnest money, and all parties should be aware of non-cash forms.
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