Contracts
An 'earnest money dispute' arises in Pennsylvania when both buyer and seller claim the escrow funds after a failed transaction. The broker should:
AAutomatically return the funds to the buyer since the sale didn't close
BHold the funds in escrow and follow RELRA's dispute resolution procedures, including interpleader if necessary✓ Correct
CDivide the funds equally between buyer and seller
DRetain the funds as a fee for their services in the failed transaction
Explanation
When buyer and seller both claim earnest money, the Pennsylvania broker should NOT release funds without mutual consent or legal resolution. RELRA allows brokers to hold disputed funds in escrow and file an interpleader action (depositing with the court) to let a judge decide the rightful recipient. Taking sides exposes the broker to liability.
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