If there is an unresolved dispute regarding disbursement of earnest money, what may the broker do?

• A. Disburse to buyer
• B. Interplead funds to the court
• C. Return to the parties equally
• D. Freeze funds indefinitely

Answer: (B)

When there’s a dispute over who should receive the earnest money, the broker should not decide the outcome. The proper step is to file an interpleader action and deposit the funds with the court. This creates a neutral process where the court determines the rightful recipient based on the contract, contingencies, and evidence presented. While the funds are with the court, the broker is protected from liability for claims by opposing parties. The court’s order then directs disbursement to the correct claimant. Disbursing to the buyer, returning funds equally, or freezing funds indefinitely would bypass the dispute or violate fiduciary duties; interpleading preserves the broker’s duty to hold funds in trust and resolves the matter lawfully.