A buyer and seller in Washington have a dispute over a $10,000 earnest money deposit held in a real estate firm's trust account. The seller claims the buyer breached the contract; the buyer claims the seller failed to perform. The closing date has passed with no resolution. Under Washington trust account rules, what should the designated broker do with the disputed funds?
Correct Answer
C) Continue to hold the funds in the trust account until the dispute is resolved by agreement or court order
Under WAC 308-124D and RCW 18.85.361, when there is a bona fide dispute over earnest money, the designated broker must continue to hold the funds in the trust account until the dispute is resolved — either by written agreement of both parties or by a court order directing disbursement. The designated broker cannot unilaterally decide who is entitled to the disputed funds.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Market allocation is an illegal antitrust practice in which competing real estate brokerages agree to divide markets among themselves by geographic area, property type, or price range, thereby eliminating competition.
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.
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