Under a Colorado Real Estate Commission-approved Contract to Buy and Sell Real Estate, what may a broker do when a dispute arises over an earnest money deposit?

A broker cannot unilaterally declare a forfeiture of the earnest money deposit for the seller without a mutual agreement from the parties involved. Such an action would not only violate fiduciary duties but could also lead to legal ramifications if contested by the buyer.

While interpleading the money to a title company could be a viable option, it typically requires a legal action initiated by the broker, which may not be necessary if the broker can simply retain the funds in a trust account until the dispute is resolved. Therefore, this option does not reflect the immediate action a broker can take under the terms of the contract.

Dividing the earnest money deposit without a mutual agreement or resolution of the dispute is not appropriate. Such an action could expose the broker to liability and undermine the integrity of the transaction process, as it does not reflect the terms of the contract or the resolution of the dispute.