[WSBARP] Residential P&S agreement ?

[Richard Holland]

As a third party escrow, the only thing I would add is that as a practical matter it is best to avoid the Court action if you can.  Not only will the escrow company charge either for doing it or for paying a lawyer to file the action (if there isn’t one with the firm) but there are filing fees and then you have to go to court and have a hearing etc.  Essentially, I can’t imagine the parties don’t end up costing themselves $2000 in legal fees and costs between the two of them before all is said and done.  Of course ultimately that is what has to happen if you can’t get a mutual instruction on release.  What we normally do when we’ve been notified that there is a dispute over EM is send out a letter that essentially says “We’ve been notified that there is a dispute over the earnest money in transaction X.  We are not arbiters and do not determine which party has the claim to the funds.  If the parties cannot agree on this matter and do not submit a mutual instruction to us by Y date (usually 30 days), we will interplead the monies into the registry of Z court.  Please be advised that the fees and costs associated with this filing will be requested as an award to us from the Court.”
I know of some firms that withhold the monies from the amount pled into court but without the parties having previously signed something with the escrow company authorizing that, I think that is a dangerous game.  I will also say that unless things have changed, technically the escrow company could decide which party was correct and pay the money out.  The reason they do not is because if they are wrong they are liable to the other party and essentially have to pay out twice.

From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of david at vaughanlawonline.net
Sent: Thursday, March 10, 2016 9:03 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] Residential P&S agreement ?

Justin,

If the transaction was under standard NWMLS forms, page 2, paragraph b. (second paragraph in b.) specifies that in the event of a disagreement over disbursement of the earnest money deposit, the "closing agent" shall commence an interpleader action.  There are other terms there that speak to timing that might be relevant to this situation.

Best regards

David Vaughan
-------- Original Message --------
Subject: [WSBARP] Residential P&S agreement ?
From: Justin Monro <justinm at monrolawfirm.com<mailto:justinm at monrolawfirm.com>>
Date: Thu, March 10, 2016 5:32 pm
To: "wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>" <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>

Listmates: property located in Snohomish county. One of my real estate brokers represents sellers of property listed on nwmls. Buyers are represented by another real estate agency. Mutual acceptance occurred at end of January 2016. Buyers were obligated to close P&S transaction on March 8,2016, but failed to do so. No extensions were signed. The agent for buyers has been very difficult to deal with. Buyers have financial funds to close [cash] but chose to try and finance deal but failed to comply with terms of financing addendum's. My clients [sellers] do not want to deal with buyers anymore. Property was placed back on market as active listing to mitigate sellers damages.

My question is: there is a significant amount of earnest money held in third party escrow account. Sellers wants to retain earnest money as damages per Form 21 P&S agreement. Buyers and buyers real estate agency are claiming they want earnest money back from escrow. What are others doing in regards to earnest money disputes?
Interpled with court or arbitration?


Thank you,

Justin K Monro
Attorney at law

Sent from my iPhone

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