Question 69

A real estate broker may release escrow monies prior to closing when ordered by a court of competent jurisdiction.

A broker is permitted to release escrow funds prior to closing if there is a court order that specifically directs them to do so, ensuring legal authority for the transaction.

A) A broker does not have the authority to release escrow funds under any conditions.

This statement is incorrect because there are specific situations, such as a court order, where a broker is authorized to release escrow funds. Thus, it does not accurately represent the broker's options.

B) With a written letter from either party's attorney stating their client refuses to close.

This option is also incorrect. A refusal to close does not inherently grant the broker the authority to release escrow funds; such circumstances typically require a legal directive, such as a court order, to proceed.

C) When ordered by a court of competent jurisdiction.

This option is correct as it directly aligns with legal protocols. A broker can release escrow funds if a competent court orders it, providing the necessary legal justification for the release.

D) The broker may release the money to the purchaser because it is his/her money.

This statement is incorrect. The broker cannot release escrow funds to the purchaser simply because they belong to them; escrow accounts are intended to be held until specific conditions, such as closing or a legal order, are met.

Conclusion

The correct answer is C, as it highlights the legal requirement for releasing escrow funds, which must be done under a court's directive. Other options fail to recognize the necessary legal framework governing escrow funds, either misrepresenting the broker's authority or providing incorrect conditions under which funds may be released.