Many telephone inquiries and complaints filed with the Commission relate to the deposit monies and what happens if the transaction was terminated. The General Assembly listened to the consumers and came together to introduce legislation to help create grounds to release deposit monies.
The complaints and calls we have received since this legislation was enacted imply some Brokers have not implemented the new law. We strongly recommend Brokers and Managers be aware of the laws, enforce them and advise agents of the process.
The new provisions concerning trust money are set forth in sections 17-502 and 17-505 of the Business Occupations and Professions Article of the Maryland Annotated Code. Section 17-502 still requires a broker who receives trust money to promptly deposit it into an account used exclusively for trust money, and adds the requirement that the trust money be deposited no more than 7 days after the acceptance of a contract of sale by both parties.
The new provisions within 17-505 address the situation in which one of the parties fails to complete the transaction. The provisions provide a procedure for the broker to return the money to the party who, in his or her good faith opinion, is entitled to it under the contract. To do so, the broker must notify both parties in writing of the intent to distribute the money, and inform them that they can prevent distribution by submitting a written protest within thirty days after the date was delivered or mailed. If neither party protests within 30 days, the trust money will be distributed in accordance with the brokerís notice.
If a party protests within 30 days, then the broker may not distribute the money until (1) the transaction is consummated or terminated; or (2) the broker receives written instructions from both parties directing the disposition of the trust money; or (3) the broker files an action for interpleader and a court disposition of the money.
For more information, visit the Law & Regulation and Legislation link on Maryland Real Estate Commission Web site.