Instructions for the Escrow Holder in the Event of a Dispute
Unless otherwise agreed to in writing, any expenses incurred by either party (Buyer or Seller) shall be paid by the respective party and shall not be paid from any earnest money deposits. The Buyer and the Seller agree that any expenses, incurred on their behalf, shall be paid by the party incurring such expenses and will not be paid from Earnest Money.
MUTUAL RELEASE OF EARNEST MONEY
In the event a contract is canceled or fails to close, the Broker will prepare a “Mutual Release” for the signature of each of the parties. The Mutual Release will relieve each of the parties from further interest and liability. It will also address the disposition of the earnest money.
THE ESCROW HOLDER RETAINS THE EARNEST MONEY IN THE EVENT OF A DISPUTE
Occasionally, the parties may not agree to the disposition of the earnest money. If an agreement is not reached and mediation is unsuccessful, the Broker may file for “Interpleader” in a court of law. Interpleader is a legal process whereby the court determines the disposition of the earnest money. The court will also determine the amount and responsibility for court costs.
In the event a dispute arises prior to the release of Earnest Money held in escrow, the escrow holder retains the Earnest Money until one of the following occurs:
- a written release is executed by the Buyer and the Seller agreeing to its disbursement;
- agreement of disbursement is reached through mediation
- interpleader or legal action is filed, at which time the Earnest Money is deposited with the Court Clerk; or
- the passage of thirty (30) days from the date of final termination of the Contract has occurred and the first three options have not been exercised; the Broker escrow holder, at the Broker’s discretion, may disburse the Earnest Money. Such disbursement may be made only after fifteen (15) days written notice to the Buyer and the Seller at their last known adddress stating the escrow holder’s proposed disbursement.