When a buyer and seller dispute the disbursement of earnest money held in a broker's trust account, the broker should:
Correct Answer
B) File an interpleader action with the court
When a buyer and seller cannot agree on the disbursement of earnest money held in a broker's trust account, the broker should not take sides or unilaterally release the funds to either party. The appropriate action is to file an interpleader action, which allows the broker to deposit the disputed funds with the court and let a judge determine the rightful recipient. This protects the broker from liability and ensures a neutral resolution. Releasing funds to one party without mutual written agreement or a court order could expose the broker to legal liability and disciplinary action by the Idaho Real Estate Commission.
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Related Topics & Key Terms
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Key Terms:
Related Concepts
Florida real estate licenses must be renewed biennially, and sales associates have specific post-license education requirements for their first renewal.
License requirements are the mandatory qualifications—including pre-licensing education, examination, and background checks—that a person must satisfy before legally practicing real estate. These requirements are established and enforced by each state's real estate commission.
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.
More Practice Of Real Estate Questions
In Wyoming real estate practice, an associate broker or salesperson is not associated with a responsible broker at renewal. What should the licensee remember?
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