According to a Maryland Real Estate Attorney, the answer is a resounding, maybe.
Real estate agents don't practice law, but we are allowed to create simple addenda, and fill in blank spaces on board approved contracts and addenda. Recently, I received an offer on a listing that used an addendum from a neighboring association. When I get these I spend a little extra time making sure I understand what the addendum is attempting to do.
The provision I had trouble with read:
7. HOLDING DEPOSIT CHECK: It is understood and agreed by all Parties that the Buyer has instructed the Escrow Agent to hold and not deposit the above described deposit check until _________ Days after Ratification at which time said check shall be deposited. In the blank field the buyer and selling agent had placed 12 days.
Messing around with escrow money deposits is one of those areas that get real estate agents and brokers in a lot of trouble.
Since Maryland Law normally requires brokers to deposit escrow monies in 7 business days from contract ratification, the fill in the blank addendum would appear to be in conflict with this requirement. There is a provision in the law that may allow buyers and sellers to give escrow money direction to brokers, but it seems more related to withdrawal and investment direction only.
Here's the problem, according to the Attorney. It hasn't been tested in court yet whether a buyer/seller direction can override the seven day deposit requirement in the law. That makes sense, but it can also put agents and brokers in unnecessary jeopardy.
Many people believe that real estate practitioners make too much money for the work we do. Part of our, and our broker's compensation, is a result of the risk we're exposed to in each transaction.
In my case, I wasn't ready to be a test case, so we countered that clause back to 7 days and moved on to ratification from there.
For the most part, fill in the blank addenda are just fine, and this one may be too. I'm not ready to be the test case so a precedent can be determined.
I generally follow my gut instinct and err on the side of caution. It's served me well so far.
Richard Iarossi, REALTOR®
Long and Foster® Real Estate, Inc.
Crofton, MD 21114
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Richard Iarossi is a full time licensed REALTOR®, working in Crofton, MD. My coverage areas are: Anne Arundel, Prince George’s, Howard, Calvert, Queen Anne, and Baltimore City and County. I specialize in residential real estate, working with both buyers and sellers. Use the registration free search on my website at www.RichSellsHomes.com. If you’re not already working with a REALTOR®...I can help. Call me at 443-995-9595 (Cell) or 410-451-6255 (Office).
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