Trust Funds
A buyer and seller disagree about who is entitled to the earnest money after a contract falls through. What should the Alabama broker do?
AGive the money to the seller automatically
BGive the money to the buyer automatically
CContinue to hold the funds until the parties agree or a court orders disbursement✓ Correct
DReturn the funds to their own operating account
Explanation
When there is a dispute over earnest money, the broker should continue to hold the funds in trust until the parties reach agreement or a court orders disbursement. The broker should not unilaterally decide who gets the money.
Related Alabama Trust Funds Questions
- If a buyer's offer is accepted by the seller and the buyer's check for earnest money is returned by the bank as NSF (non-sufficient funds), the broker should:
- If a disputed earnest money situation cannot be resolved between buyer and seller, the broker may interplead the funds. 'Interpleading' means:
- In Alabama, an earnest money deposit held by a real estate broker must be:
- Conversion of client funds in a trust account occurs when a broker:
- Which of the following BEST describes 'commingling' of funds?
- In Alabama, a qualifying broker who manages property for owners must maintain:
- Which of the following trust account activities would constitute commingling?
- If AREC discovers that a broker has been consistently depositing personal funds into the trust account in excess of what is needed for bank fees, AREC would likely characterize this as:
Practice More Alabama Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Alabama Quiz →