Conflicting requests in which both the buyer and the seller demand that the broker release escrowed funds is called an

• A. escrow dispute
• B. good-faith doubt
• C. binding arbitration
• D. neutral mediation

Answer: (A)

When both the buyer and the seller want the broker to release escrowed funds but cannot agree on who is entitled, the situation is called an escrow dispute. This term specifically describes the conflict over how the funds held in escrow should be disbursed. The broker must not release the funds until the dispute is resolved through the contract, escrow agreement, or applicable law. Typically, the broker will hold the funds and pursue a resolution via the prescribed dispute process, which could involve mediation, arbitration, or a court proceeding to determine the proper disbursement.

The other terms refer to ways of resolving disputes rather than the conflict itself. Good-faith doubt describes a broker’s reasonable concern about one party’s ability or willingness to perform, not the dispute over holding funds. Binding arbitration and neutral mediation are methods that may be used to settle disputes, but they aren’t the label for the situation where conflicting demands exist about escrow funds.