Where's the Earnest Money Deposit!?

[ifhn]

What is the name of your state? MD

Private party transaction in MD. On December 4, buyer faxed to seller a signed copy of contract & copy of earnest money check made out to a title company. Signed copy sent back Dec 8. Seller discovered that no earnest money was given to title company, and terminated on Jan 15. Buyer finally deposited earnest money on Jan 23.

Contract was silent re: when E$ was to be deposited with title company, but does specifically cite earnest money to a title company.

Did buyer have 7 days to give $$ to title company? Is there a specific MD law regarding when earnest money must be deposited? Is it safe to say that 6+ weeks was not w/in a reasonable amount of time?

 

[HomeGuru]

What is the name of your state? MD

Private party transaction in MD. On December 4, buyer faxed to seller a signed copy of contract & copy of earnest money check made out to a title company. Signed copy sent back Dec 8. Seller discovered that no earnest money was given to title company, and terminated on Jan 15. Buyer finally deposited earnest money on Jan 23.

Contract was silent re: when E$ was to be deposited with title company, but does specifically cite earnest money to a title company.

Did buyer have 7 days to give $$ to title company? Is there a specific MD law regarding when earnest money must be deposited? Is it safe to say that 6+ weeks was not w/in a reasonable amount of time?

**A: if the Seller sent a termination letter to the Buyer and a copy to the title company, then there was no contract period. When the Buyer later deposited the earnest money is a moot point.

 

[seniorjudge]

Did the seller do anything (like accept the dough) after the late payment?

 

[HomeGuru]

Did the seller do anything (like accept the dough) after the late payment?

**A: good question and another one would be "writer, are you the Seller or the Buyer?"

 

[ifhn]

Did the seller do anything (like accept the dough) after the late payment?

I, the seller, did not accept any late earnest money. After discovering that no deposit had been made (approximately one month after signed acceptance provided), I terminated in writing sent to buyer directly. I did call the title company & apprised them that I terminated the k in writing, but gave them nothing in writing. Nonetheless, buyer tried to get the earnest money in, but it wasn't until AFTER I terminated.

The buyer is raising a stink...claiming the k is still enforceable. He's even threatened suit.

If he does file suit, what are my chances of recovering fees? It seems that buyer would be foreced to take an extremely outrageous position -- claiming an enforeceable k despite the 6+ weeks it took him to deposit the $$.

Thanks for the replies -- I appreciate both of your input.

 

[seniorjudge]

What are YOUR damages?

What fees?

 

[ifhn]

What are YOUR damages?

What fees?

Attorney fees, costs.

 

[seniorjudge]

Attorney fees, costs.

How much?

How did the bad guy cause these fees and costs?

They sound like the cost of doing business to me without any further details; thus not compensable.

 

[HomeGuru]

Attorney fees, costs.

**A: those items are not damages.

 

[ifhn]

How much?

How did the bad guy cause these fees and costs?

They sound like the cost of doing business to me without any further details; thus not compensable.

By bringing a baseless claim...especially if MD law specificies a clear time limit on depositing earnest money. The closest law on point that I've found so far is House Bill 460 (2001 Regular Session), which was passed:

/* HOUSE BILL 460
Article - Business Occupations and Professions 17-502.
(a) An associate real estate broker or a real estate
salesperson who obtains trust money while providing real estate brokerage services promptly shall submit the
trust money to the real estate broker on whose behalf the
associate real estate broker or the real estate salesperson provided the real estate brokerage services.

(b) (1) Except as otherwise provided in subsection (c) of this section, a real estate broker [promptly] PROMPTLY, WITHIN BUT NOT MORE THAN 7 BUSINESS DAYS AFTER THE ACCEPTANCE OF A CONTRACT OF SALE BY BOTH PARTIES, shall deposit trust money in an account that is maintained by the real estate broker:
(i) separately from the real estate broker's own accounts; and
(ii) solely for trust money.
(2) A real estate broker may not use trust money for any purpose other than that for which it is entrusted to the real estate broker.
(c) Subsection (b)(1) of this section does not apply if the real estate broker receives written directions to the contrary as authorized under § 17-505(c) of this subtitle.

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect October 1, 2001. */

Obviously, this applies to brokers. However, the time limit should have some bearing, if not dispositive, on a private party's time limit -- in defining what a reasonable amount of time would be. Of course a private party might not be held to the same standard as a broker, but this time limit for depositing trust money isn't necessarily within such a distinction. So, a R amount of time could be 7 days for a private party. Maybe even 10 days?

Regarding the award of attorney fees, aside from the sales contact actually specifying the award of attorney fees, costs, etc., there are two other potention sources: statutory & judicial discretion. Since the contract is silent, I was wondering whether either of you knew anything wrt MD's position on awarding such fees & costs. The buyer's claim is outrageously weak, and as such, my thoughts were that it might be so outrageous that a judicial award might be called for, or even a statutory claim being triggered thereby.

Yes, these are not compensatory, incidental, or punitive damages. But as noted above, they could be contrued as statutory damages insofar as statutorily provided.

Again, was just wondering if either of you had any insignt wrt MD's posture.

Thanks.

 

[HomeGuru]

Aside from a sales contact specifying the award of attorney fees, costs, etc., there are two other sources: statutory & judicial discretion. Since the contract is silent, I was wondering whether either of you knew anything wrt MD's position on awarding such fees & costs. The buyer's claim is extremely weak, and as such, my thoughts were that they might be so extremely weak that a judicial award might be called for or even a statutory claim being triggered.

Yes, these are not compensatory, incidental, or punitive damages. But as noted above, they could be contrued as statutory damages insofar as statutorily provided.

Again, was just wondering if either of you had any insignt on MD's posture.

Thanks.

**A: sure, MD has poor posture and needs to sit up straight to avoid constant backaches and a curvature looking spine.

 

[ifhn]

**A: sure, MD has poor posture and needs to sit up straight to avoid constant backaches and a curvature looking spine.

I believe there are some new back-straightening chairs on the market.

 

[HomeGuru]

I believe there are some new back-straightening chairs on the market.

**A: personally, I prefer a good looking female chiropractor with a nice body.

 

[HomeGuru]

You know...........