Earnest Money Disputes After a Fail to Close Can Include Mediation Settlement

For earnest money disputes, the outcome may depend on who is holding the earnest money.

If a lawyer is holding the earnest money, contact the lawyer about how the money can be disbursed. SCR recommends always having the buyers, sellers, and lawyer execute an escrow agreement when the lawyer takes possession of the money (e.g. at the beginning of a deal) and the escrow agreement should cover all aspects of the money including how the money is disbursed after a failed closing.

If a BIC is holding the earnest money, the LLR SC real estate commission states that the money remains in trust long term until:

1. All the parties sign a disbursement agreement (e.g. SCR518, SCR517, mediation agreement).
or
2. A judge of competent jurisdiction signs a disbursement order (e.g. magistrate interpleader lawsuit order, lawsuit order).

REALTOR® Associations offer mediation services:

https://screaltors.org/mediation/

Posted by : Byron King on 4/10/18 (This information is only accurate as of 4/10/18. You must contact SCR for updates and changes to this information after 4/10/18 as laws and regulations may change over time. SCR 803-772-5206 or info)