New York Real Estate Salesperson ExaminationBrokerage and Salesperson ResponsibilitiesEasy
A real estate broker in New York receives an offer from a buyer that includes a post-dated check as the earnest money deposit. According to New York real estate law, how should the broker handle this situation?
- AAccept the check and place it in a safe deposit box until the closing date.
- BAccept the check but hold it until its date, then deposit it into the escrow account.
- CAccept the check and deposit it immediately upon receipt, notifying the seller.
- DRefuse to accept the post-dated check and request a currently dated form of payment.
Show answer & explanationAnswer & explanation
Correct answer: D. Refuse to accept the post-dated check and request a currently dated form of payment.
New York real estate law prohibits brokers from accepting post-dated checks as earnest money deposits. Brokers must ensure all funds deposited into an escrow account are immediately available and not subject to future conditions.
Why the other options are wrong
- A. Placing the check in a safe deposit box does not resolve the issue of it being post-dated and untrustworthy as an earnest money deposit.
- B. Holding a post-dated check until its date is still considered improper handling of earnest money in NY.
- C. Depositing a post-dated check immediately would result in it bouncing, which is not permissible.
Post-Dated Check Prohibition (NY)
In New York, real estate brokers are prohibited from accepting post-dated checks as earnest money deposits.
- Earnest money must be immediately available.
- Post-dated checks create uncertainty and potential issues.
- Brokers must request a currently dated form of payment.
Memory trick: No future money for a current deal.