When a buyer and seller cannot agree on the disposition of earnest money held in a broker's escrow account, what is the broker's appropriate course of action?
Correct Answer
B) Interplead the funds with the court and allow the court to determine the proper disbursement
When a genuine dispute exists between a buyer and seller over earnest money held in escrow, the broker should not unilaterally release the funds to either party. The appropriate action is to interplead the funds with the court, which allows the court to determine the rightful recipient. This protects the broker from liability and ensures a neutral resolution, consistent with Alaska real estate regulations governing trust accounts.
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Related Topics & Key Terms
Related Topics:
Key Terms:
Related Concepts
The National Do Not Call Registry is a federal program administered by the FTC that allows consumers to opt out of receiving unsolicited telemarketing calls, including calls from real estate agents soliciting business.
Brokers in Florida have strict responsibilities for managing escrow accounts, including monthly reconciliation and proper handling of trust funds.
FREC has the authority to impose fines and other disciplinary actions on licensees who violate real estate laws and rules.
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