Legal Question in Real Estate Law in Michigan

Re: Return of Earnest Money Deposit form

You must review the original agreement which states the terms for the earnest money deposit. If the agreement indicates that a full mutual release of both parties is required before the title company returns the earnest money deposit, then both parties must sign a release.

If the original agreement does not require a mutual release, then the title company is in error. Neither the title company nor the seller or buyer may impose additional conditions which were not part of the earnest money deposit terms in the original agreement.

If a mutual release is not required, then a written agreement to allow the refund, signed by buyer and seller, usually will suffice. You should consult an attorney, who can review the agreement for the earnest money deposit, and who can then draft the agreement to release the funds. The attorney might simply re-write the form provided by the title company and omit the general release language.

Generally, most earnest money provisions require only that both parties sign a form which authorizes the title company or other holder of the earnest money deposit to refund the deposit. Both are required to sign, because the seller might have a claim to the deposit, if, for example, the buyer breached the agreement. In any event, if the parties cannot agree, or if the holder of the deposit refuses to release the money, then you must commence a lawsuit to compel the return of the deposit.

This response is not intended as legal advice. Your rights and obligations will depend upon the particular facts and circumstances affecting this matter. You should consult an attorney in your area to discuss all of the relevant facts and circumstances. No attorney/client relationship is created as a result of this response. I may be contacted at 248.788.8225, to discuss this or other legal matters.