Can a buyer deliver the termination option fee to the title company?

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Delivering the termination option fee to the title company puts the buyer at risk of not having an unrestricted right to terminate the contract. Paragraph 23 of the TREC One to Four Family Residential Contract (Resale) requires the option fee to be delivered to the seller or the seller’s agent—not the title company—within three days after the effective date of the contract. If the option fee is instead delivered to the title company, this provision has not been satisfied. Paragraph 23 also specifies that strict compliance with the time for performance is required. If the termination option fee is delivered to the title company but the title company does not provide it to the seller or seller’s agent by the deadline, the buyer does not have a valid termination option.

Source: TAR

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