Legal Library

The Division of Real Estate Earnest Money with Title Company Addendum

May 3, 2018

Author: UAR

Forms Highlight:

The Division of Real Estate Earnest Money with Title Company Addendum

The Division of Real Estate (DRE) has created an addendum that allows the REPC to be modified so that earnest money may be deposited with a title company. This addendum provides all the relevant contact information for the title company, and also puts the buyer and seller on notice that the title company may require BOTH signatures to release earnest money. This form was created to address two main issues.

One, agents simply were not modifying the REPC and depositing earnest money with a title company. This is a breach of contract and makes the contract potentially voidable by the seller. It also violates the agent’s fiduciary duty of reasonable care and diligence and is a potential ethics violation of Articles 1 and 9.

Second, surprisingly, the UAR’s legal hotline has received numerous calls over the years where the REPC is cancelled or falls apart, and the earnest money just sits in a title company’s trust account. The issue is that typically a title company will require both the buyer and the seller to sign to release the funds, even if the REPC states that no further written authorization is necessary. The Division’s addendum highlights this issue and allows the buyer and the seller to truly consider the possible consequences (good and bad) of having earnest money held with a title company.

If you have any questions about this form or any others, feel free to call the UAR’s legal hotline from Monday, Wednesday, and Friday to 8:30 a.m. to 4:00 p.m. (This legal tip is not intended to represent specific legal advice. Each situation is different. Consult your broker or attorney.)

Click the link below to view the form.

Resource: Earnest Money with Title Company Addendum