To whom do I return the earnest money when multiple buyers do not agree?
QUESTION: I represent a married couple who submitted an unsuccessful offer on a property. Both parties were listed as the “Buyer” in the proposed contract. When the couple submitted the offer, the earnest money check was issued from an account only in the husband’s name. Shortly after the seller rejected the offer, the couple filed for divorce, and now the wife is asking that the earnest money be refunded to her. The husband disagrees. To whom should I write the check?
ANSWER: Paragraph 1(e) of the Offer to Purchase and Contract (Form 2-T) states that if an offer isn’t accepted, or if a condition of any resulting contract isn’t satisfied, then the Earnest Money Deposit (“EMD”) must be refunded to “Buyer.” The term “Buyer” is defined in paragraph 1(b). Also see paragraphs 4(f), 8(n), and 12 for similar language. Unless you have agreement from all the buyers listed in an offer or contract for some other disbursement, you should issue the EMD to all “Buyers” listed in paragraph 1(b).
If you do not feel comfortable writing a check to all “Buyers,” you may also deposit the money with your Clerk of Court pursuant to N.C.G.S. § 93A-12 since you received the EMD in your fiduciary capacity.
Release Date: 8/17/2017
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