Contracts
Which of the following best describes an earnest money dispute between buyer and seller?
AThe broker must immediately disburse the funds to the seller
BThe broker must hold the funds until both parties agree in writing or a court orders disbursement✓ Correct
CThe broker returns the funds to the buyer automatically after 30 days
DAREC decides who receives the earnest money
Explanation
When there is a dispute over earnest money, the broker should continue holding the funds in their trust account until both parties provide written authorization for disbursement or a court order is obtained. Unauthorized disbursement exposes the broker to liability.
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