A buyer and seller in Spokane have signed a Purchase and Sale Agreement for a single-family home. The buyer's broker holds the $10,000 earnest money deposit. Under Washington law, in whose name must the trust account holding this earnest money be maintained?
Correct Answer
A) The designated broker's name, on behalf of the brokerage
Under RCW 18.85.285 and DOL rules, earnest money and other client funds must be deposited into a trust account maintained in the name of the designated broker (or the firm). The designated broker is responsible for all trust account funds held by the brokerage. Individual brokers or managing brokers cannot maintain their own trust accounts — the designated broker bears this statutory responsibility.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A breach of contract occurs when one party fails to perform their obligations under the contract without a legal excuse. The non-breaching party is entitled to legal remedies including damages, specific performance, or contract rescission.
Consideration is something of value exchanged between parties to a contract, making the agreement legally binding. It can be money, a promise to act, a promise to refrain from acting, or anything else of value.
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
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