In Georgia, earnest money disputes are typically resolved by:
Question & Answer
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The broker keeping the funds
The broker keeping the funds is never a legally permissible resolution — earnest money belongs to either the buyer or seller depending on the contractual outcome, and a broker who retains disputed funds for their own benefit would be committing conversion and would face license revocation and criminal liability under Georgia law.
Interpleader action or agreement between parties
Automatic return to buyer
Earnest money does not automatically return to the buyer simply because a dispute exists; the buyer must establish a contractual or legal right to the funds, and automatic return without agreement or court order would improperly prejudge the dispute in the buyer's favor without due process.
State real estate commission
The Georgia Real Estate Commission (GREC) does not adjudicate earnest money disputes between private parties — its jurisdiction is limited to licensing matters and broker conduct, not the substantive resolution of civil contract disputes over funds.
Why is this correct?
Under Georgia law and the Georgia Association of REALTORS® contract forms, when earnest money is disputed and the parties cannot reach a written agreement on disbursement, the broker is authorized — and often required — to file an interpleader action in the appropriate court, depositing the funds with the court clerk and naming both buyer and seller as defendants. This approach is codified in Georgia's brokerage relationships and contract law framework, and it protects the broker from liability by transferring the decision-making authority to a neutral judicial body. Alternatively, if both parties agree in writing, the broker may disburse the funds according to that mutual agreement without court involvement.
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