§ 2214. Trust and escrow accounts

(a) Every real estate broker, within five banking days, shall deposit in a trust or escrow account in a bank or other financial institution licensed to do business in this State all earnest money and contract deposits held by him or her as a real estate broker in which the clients or other persons with whom the broker is dealing have an interest. Trust and escrow accounts shall be maintained separate and apart from a broker's individual or office account. The broker shall maintain at the broker's usual place of business, books, records, contracts, and other documents pertinent to or relating to the trust or escrow account and monies therein, which shall be open for inspection by the Commission and its duly authorized agents at the broker's usual place of business during regular business hours. The broker shall notify the Commission, within 10 days after opening any trust or escrow account, of the bank or other financial institution in which the account is located.

(b) If a deposit is reasonably expected to earn a substantial amount of interest, the broker shall, at the request of the person or persons making the deposit, place the deposit in an individual interest-bearing trust or escrow account for the benefit of the beneficial owner. In regard to individual interest-bearing trust and escrow accounts:

(1) Unless otherwise agreed to in writing by all parties, the interest earned shall be applied to the purchase price due from the buyer if the sale is consummated, shall be returned to the buyer if the deposit is returned to the buyer, and shall be payable to the seller if the buyer defaults. Contracts shall carry this language conspicuously above the signature lines.

(2) No checks shall be drawn against uncollected deposits in the account.

(3) None of the contract deposits shall be withdrawn until the contract has been terminated by performance, or by operation of its own terms, or by agreement in writing between all parties involved in the contract, or by order of a court of competent jurisdiction.

(c) If a deposit is not reasonably expected to earn a substantial amount of interest, the broker shall place the deposit in a pooled interest-bearing trust or escrow account and direct that the interest be remitted to the Vermont Housing Finance Agency in accordance with the provisions of 8 V.S.A. § 14210.

(d) The broker shall inform the depositor whether funds are deposited into an individual account pursuant to subsection (b) of this section or in a pooled account pursuant to subsection (c) of this section. The broker shall retain a written statement of this disclosure signed by the beneficial owner of the account. (Added 1969, No. 283 (Adj. Sess.), § 12; amended 1985, No. 6, § 1; 1991, No. 86, § 4, eff. Jan. 1, 1992; 1999, No. 153 (Adj. Sess.), § 25, eff. Jan. 1, 2001; 2013, No. 138 (Adj. Sess.), § 14.)