Property Management
A Massachusetts property manager receives a court order attaching (garnishing) funds from a tenant's security deposit held in escrow. The manager should:
AImmediately release the funds to the court
BConsult with legal counsel before taking any action, as security deposits have specific legal protections✓ Correct
CReturn the funds to the tenant
DTransfer the funds to the landlord
Explanation
Security deposit funds held in escrow are subject to specific legal protections. Before releasing escrow funds pursuant to a court order, the property manager should consult with legal counsel to ensure compliance with both the court order and Massachusetts security deposit law.
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Key Terms to Know
Escrow
A neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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