Question:
There are only a few ways that the deposit can be released from the real estate brokerages trust account, the mutual release being one of them.
What if you have the deposit held in the lawyers trust account? Is it easier to get the deposit back in situations where the seller will not sign the mutual release?
Answer:
The alternatives related to the release of a deposit are:
- Completion of the transaction
- Directions by all parties,
- Court Order.
Under discussion is a proposal for a quick release deposit. The Buyer gives the deposit to his own lawyer, that is, the Buyer’s lawyer not the Seller’s lawyer.
Then, the Agreement contains a Direction already signed provided that if “X” doesn’t happen then, the lawyer is directed to release/return the deposit.
Truly, it should not make any difference if the deposit is held by the Seller’s lawyer. The test would be the same in both cases. Did “X” happen? If not, the Directions are already set forth in the Agreement.
That may be fine, but really what Seller would agree? It’s really no deposit at all, in the circumstances.
This is really a situation with a “magically disappearing deposit”.
This would be the “magician’s deposit clause”.
Brian Madigan LL.B., Broker