The following case study highlights the importance of ensuring compliance with deadlines in purchase contracts. Particularly, a real estate licensee representing a buyer is required to exercise ordinary care to ensure that the earnest money deposit is delivered on time.

The Facts

Disclaimer: All names and dates are fictitious.

On February 21, 2025, Andy Dufresne (buyer) and Ellis Boyd Redding (seller) entered into a contract for the purchase of a residential property, located at 456 Sandy Point Road. The real estate licensee representing the buyer was Samuel Norton. This matter arose from a complaint filed against Norton by the listing agent.

The contract required that the buyer pay an earnest money deposit by electronic payment within 5 days of ratification of the contract to the escrow agent, Shawshank Settlement Services. Therefore, the buyer was required to deliver the earnest money deposit to the escrow agent by February 26, 2025.

As of March 11, 2025, the buyer had not delivered the earnest money deposit to the escrow agent. Norton followed up with the buyer that day, and the buyer wrote and delivered a check for the earnest money deposit.

When asked about the late delivery and the improper form of payment, Norton stated that he reminded the buyer multiple times to make the deposit, but the buyer was a busy accountant with a highly unpredictable schedule. Norton further stated that while the deposit was not made on time, it was delivered as quickly as possible. Additionally, Norton downplayed the severity of the late deposit, indicating that the seller had no other offers on the property and chose to pursue the contract even though the deposit was late.

The Result

The Real Estate Board found that Norton failed to exercise ordinary care to ensure that the earnest money deposit was delivered to the escrow agent within 5 days of ratification of the purchase contract.

The Penalty

Norton was fined $550 and required to complete 3 hours of education on Escrow Requirements within six months.