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The owner and broker entered into an Arizona REALTORS® Residential Listing Contract Exclusive Right to Sell/Rent (the “Listing Agreement”).  Thereafter the owner entered into a contract to sell the property.  Pursuant to the contract the buyer delivered to escrow a $75,000 earnest money deposit.  The buyer subsequently defaulted on the contract and agreed to forfeit the earnest money deposit.  The broker demanded that he be paid one-half of the earnest money deposit as required by the Listing Agreement.  One-half of the earnest money deposit is less than the commission the broker would have earned had the contract closed escrow.  The seller refuses to instruct escrow to pay the broker the requested funds.


Is the broker entitled to one-half of the earnest money deposit?


See discussion. 


The Listing Agreement at lines 71-73 provides: 

If completion of a sale or rental is prevented by default of Owner, or with the consent of Owner, the entire sale or rental commission, as appropriate, shall be paid to Broker by Owner.  If any earnest deposit is forfeited for any other reason, Owner shall pay broker a brokerage fee equal to the lesser of one-half of the earnest deposit or the full amount of the commission. 

Thus, the broker is contractually entitled to one-half of the earnest money deposit.