What if the contract fails and the seller and buyer cannot agree on who is entitled to the earnest money?
A. According to the terms of the standard purchase and sale agreement and the rules governing real estate brokers, if there is a dispute between buyer and seller over the return or forfeiture of an earnest money deposit, the broker holding the money must continue to hold the funds in trust until buyer and seller resolve the dispute in writing or until a court decides the matter (less than $5000, small claims court; mor than $5000, usually District or Superior Court, although some cases may go to federal court). The parties may also resolve disputes through voluntary or court ordered mediation. If no one institutes a proceeding within a state specified time frame, then the funds are deemed unclaimed and delivered to the State Treasurer’s Office as Unclaimed Property. If an attorney for you holds the earnest money, the attorney must hold or dispose of the funds in accordance with the rules of the Idaho State Bar. When a form other than the standard purchase and sale agreement is used, it
