Trust Funds
If a disputed earnest money situation cannot be resolved between buyer and seller, the broker may interplead the funds. 'Interpleading' means:
AThe broker keeps the funds until the next renewal period
BThe broker files a court action and deposits the disputed funds with the court, letting the court decide who is entitled to them✓ Correct
CThe broker splits the funds equally between buyer and seller
DThe broker returns the funds to the buyer automatically
Explanation
Interpleader is a legal proceeding in which the broker deposits the disputed funds with the court and asks the court to determine the rightful owner. This protects the broker from liability while resolving the dispute through proper legal channels.
Related Alabama Trust Funds Questions
- Which of the following is NOT an acceptable reason for a broker to withdraw funds from an Alabama trust account?
- Commingling in real estate refers to:
- A broker who holds earnest money from a buyer and the deal falls through due to a contract dispute must:
- Which of the following would be considered a violation of Alabama trust account rules?
- In Alabama, a qualifying broker's trust account must be reconciled:
- A broker may disburse funds from a trust account based on:
- An Alabama broker may deposit their own funds into a trust account in which scenario?
- Conversion of trust funds occurs when a broker:
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