Disputes Flashcards
(14 cards)
Can escrow funds held by a title company or attorney be resolved by the FREC using the EDO process?
no
The EDO process is not applicable for escrow funds held by title companies or attorneys.
Can buyer & seller escrow disputes go to the courts for resolution?
yes
Courts can resolve disputes between buyers and sellers regarding escrow.
The broker must not deliver the deposit to the other party until when? What is the exception?
The transaction is closed, except when both parties direct and agree to in writing how funds should be disbursed
Written agreement from both parties allows for different disbursement instructions.
What should a broker do if there are conflicting demands regarding transactions or a dispute? (2)
- Notify the FREC, in writing, within 15 biz days;
- Broker must institute one of the 4 settlement procedures within 30 biz days (from the time the broker received the conflicting demands)
What are the four settlement procedures (to resolve escrow disputes)?
- Mediation
- Arbitration
- Litigation
- EDO - Escrow Disbursement Order
What is mediation?
- An informal way to settle a dispute using an independent third party;
- if an agreement is reached, an enforceable written agreement is signed
What is arbitration?
Prior written consent of all parties to allow a disinterested third party to decide the dispute outcome and makes the terms binding
What is litigation?
The party files a suit in court
What are the two types of court procedures for litigation (over escrow funds)?
- Interpleader
- Declaratory judgment
What is an EDO?
- Escrow Disbursement Order
- FREC reviews the documents and gives a decision as to who is entitled to the funds
Sale of HUD-owned property using a HUD contract must comply with what?
the earnest money deposit requirement for the specific HUD contract
What may the broker do if they give written notice of buyer’s intent to cancel the contract for a residential condominium unit?
The broker may return the escrowed property to the purchaser
What should the broker do if a buyer in good faith fails to satisfy the terms specified in the financing clause of a contract?
The broker should use a release of escrow funds form and get signatures from all parties to protect themselves from any civil liability
When the escrow is held at a title company or with an attorney, is the broker obligated to report an escrow dispute to FREC or to institute a settlement procedure?
no
