Earnest Money, a Photographer, and an Unlicensed Assistant
Delia is the qualifying broker at Summit Realty in Casper. On Monday her salesperson, Rick, takes a $10,000 earnest-money check for a $320,000 house. The check is payable to 'Summit Realty Trust.' Because the trust-account deposit book is at the bookkeeper's office, Rick deposits the check in the firm's operating account. On Wednesday Delia pays a $600 photographer from that account for listing photos of another property. Rick's unlicensed assistant, Kim, drafts a repair addendum, tells the buyer 'the seller agreed to fix the furnace,' and emails it to the title company. The cooperating broker later demands a $4,000 commission split that Delia disputes. Delia's transaction file contains the contract and closing statement but no trust-account ledger or reconciliation.
1. Identify the Wyoming license-law and Commission-rule problems in the handling of the $10,000 and the $600 payment, and explain how the funds should have been handled from receipt through closing.
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The $10,000 is trust money, not operating money. Wyoming law and Commission rules require the broker to place it in the trust account promptly, keep it separate, and disburse it only as the transaction directs. Paying the $600 photographer from that account is commingling and conversion: the photographer is a brokerage business expense, and trust funds cannot be used to fund operations before closing. Correct handling: make a receipt ledger entry, deposit to trust, keep an individual ledger for the transaction, make no cash withdrawals, and at closing pay per the settlement statement. If the sale fails, return the earnest money only on a written release signed by both parties or a court order. If the parties dispute entitlement, hold the funds and seek interpleader rather than choosing a side. The broker is responsible for supervision and for the account reconciliation.
2. Kim's conduct: what may an unlicensed assistant do, and what should Delia do now?
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Kim may perform clerical and administrative tasks: scheduling, delivering documents, compiling factual property information, and answering status questions. She may not draft contract terms or a repair addendum, negotiate, interpret the contract, or tell a party what the seller agreed to. Her statement and email create unauthorized-practice and misrepresentation risk. Delia should immediately correct the record in writing to the buyer, seller, and title company; confirm what the seller actually agreed to in writing; document the correction; retrain and restrict Kim; and review all files Kim touched. The broker's supervisory failure can be a separate license-law violation even if Kim is unlicensed.
3. The commission dispute and the missing ledger: what records must Delia keep, and what risk does the gap create?
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The file must contain the listing and buyer-broker agreements, the offer and all counteroffers, disclosures, inspection notices, the settlement statement, commission agreements, and a trust-account ledger showing receipt, deposit, and disbursement. The broker also needs the trust-account journal, bank statements, and reconciliations. Missing records are serious because the Commission can audit and because the broker must prove proper handling. Do not pay the disputed $4,000 split from trust funds without a written agreement signed by the competing broker or a court order; a disputed commission is not a closing cost that can be unilaterally deducted. Keep the disputed amount in trust or in a segregated account and document the dispute.