Is there a duty to share a copy of an earnest money check with the listing agent?

QUESTION: I represent a buyer who recently signed a contract to purchase some residential property. The contract required the buyer to pay a $5,000.00 earnest money deposit and identified my firm as the Escrow Agent. The buyer sent us a check in payment of that deposit and we deposited it in our trust account. The listing agent just called and asked me for a copy of the buyer’s check to prove that the deposit had been paid. It seems to me that the check contains confidential information. Can I send a copy of the check to the listing agent? Am I required to do so?

ANSWER: While brokers acting as escrow agents are not required to provide a copy of an earnest money check to anyone else, they are permitted to do so as long as 1) their buyer client authorizes it, or 2) the broker redacts certain information, including the bank account number, on the face of the check. In the unlikely case where a buyer has included their social security number or their drivers license number on their check, that information should be redacted as well.

The fact is that although the Real Estate Commission’s record retention and trust accounting rules obligate brokers who maintain a trust account to retain copies of earnest money receipts, deposit tickets and other evidence of deposits, there is no rule requiring brokers to provide a copy of an earnest money check to anyone else.

While sharing a copy of the check is permitted, brokers should not share their client’s confidential information. North Carolina’s Identity Theft Protection Act has specific restrictions on how businesses handle “Personal Information” that they possess or maintain. “Personal Information” is defined as a person’s first name (or initial) and last name in combination with that person’s “identifying information” including their social security number, drivers license number, bank account number and credit card number.  Any business that obtains Personal Information of a North Carolina resident must take reasonable measures to protect against unauthorized access to or use of that information “in connection with or after its disposal.” Also, businesses must notify the consumer if there has been any unauthorized access to records containing Personal Information.

To avoid a breach of confidentiality, brokers who share a copy of an earnest money check should first redact the buyer’s bank account number along with any other “identifying information” appearing on the face of the check.

Release Date: 11/08/2018