Agency & LawQuestion 46 of 120
A broker holds earnest money as escrow agent. If a dispute arises between buyer and seller over who is entitled to the funds, the broker should generally:
a.Release the funds to whichever party asks first
b.Keep the funds as a fee for the trouble
c.Automatically give the funds to the seller
d.Hold the funds until the parties agree in writing or a court directs disbursement
Explanation
An escrow agent holding disputed funds must not favor either side and should retain the money until the parties provide written agreement or a court orders disbursement. Improperly releasing disputed earnest money can create liability for the broker.
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