When a Richmond-Area Purchase Ends Before Closing: How a Broker Must Handle the Deposit Under Virginia Code 54.1-2108.2

Published October 23, 2026

When a Virginia purchase ends before closing, the broker holding your deposit cannot simply hand it to whichever side asks first. Under Code of Virginia 54.1-2108.2, the broker keeps the money in escrow until all parties agree in writing, a court orders it, the funds are interpleaded into court, or the contract itself clearly says who gets them.

This is the second article in a pair. The first, on who holds your earnest money and what the Code and Real Estate Board require, covers where the deposit sits. This one covers what happens when the deal falls apart. It is general information, not legal advice. For your own contract, ask a Virginia real estate attorney before you send or answer any notice. For the practical side of walking away, see our guide to backing out of a Richmond contract. The statute applies to purchases in the city of Richmond, Henrico County, Chesterfield County and Goochland County alike.

Your contract decides first: inspection, financing and appraisal dates

The statute’s fourth path sends the money to whoever is entitled under the “clear and explicit terms of the contract that established the earnest money deposit.” So the first thing to read is not the Code. It is your contract’s contingency paragraphs. For an inspection, a financing or an appraisal contingency, find three things: the deadline, the way notice must be given, and what the contract says happens to the deposit if you end the deal on time.

We are not going to quote a standard form or a typical number of days, because your contract controls and we have not read yours. What we can say is where the topics are explained. Our guide to contingencies covers how they work, appraisal gap coverage covers a promise some buyers add to cover a low appraisal, and rate lock extensions explain why a financing date and a lock date are not the same thing. Seller-side views are in accepting a contingent offer and how counteroffers work.

Four ways the money can leave escrow

Section 54.1-2108.2 lists what must happen before a broker lets go of a deposit when the transaction is not consummated. The broker holds the funds in escrow until one of these occurs:

1. Everyone agrees in writing. All principals sign an agreement on who gets the money, and the broker returns it to the principal named in that agreement.
2. A court orders it. A court of competent jurisdiction orders the disbursement.
3. The funds are interpleaded. The broker pays the money into a court of competent jurisdiction, and the court sorts out who gets it.
4. The contract is clear and explicit. The broker releases the funds to the principal entitled to them under the contract’s clear and explicit terms.

Four scenarios and what the statute points to

Scenario A: Buyer ends the contract inside a contingency period, seller agrees

Both sides sign a release that names the buyer. This is path 1. The broker returns the deposit as the agreement says. The statute treats that written agreement as the first path out of escrow.

Scenario B: Buyer ends the contract, seller disagrees, the contract is silent or unclear

The broker does not have to pick a winner. The statute says that, apart from clear and explicit contract terms, no broker is required to determine who is entitled to the money. The broker can keep holding the funds, or can ask a court to take them through an interpleader action. A broker who complies with the section is immune from liability to the parties to the contract. The immunity covers the broker’s handling of the funds. It does not decide the buyer’s dispute with the seller.

Scenario C: The contract clearly says who gets the money

This is path 4. If the language is clear and explicit, the broker may release the funds to the principal the contract names, without a court order. Because only the contract can create that clarity, how a clause is worded matters more than what anyone remembers agreeing to. A Virginia real estate attorney can tell you whether your clause meets that standard.

Scenario D: The broker sends a notice and nobody answers

The statute lets a broker send written notice that the funds will be released unless a written protest comes within 15 calendar days of the notice date from the principal who is not receiving the money. The notice must follow the delivery method in the contract. If the contract is silent, the statute lists hand delivery, mail with proof of mailing, electronic delivery with proof, or overnight delivery. If you are the party who would lose the money, the clock is short, and the protest must be in writing.

What happens if the money goes to court

The statute says a principal broker or supervising broker holding escrow funds for a principal “may seek to have a court of competent jurisdiction take custody” of disputed or unclaimed funds through an interpleader under Code of Virginia 16.1-77. That section gives general district courts jurisdiction over interpleader suits and says the usual dollar limit does not apply to one limited to disposition of an earnest money deposit under a purchase contract. Either the stakeholder or any claimant can bring the action, the initial pleading must name every party in interest who is not a plaintiff, and the general district court has no power to issue injunctions.

In plain words: if the buyer and seller cannot agree and the contract does not settle it, the broker can put the money in the court’s hands and step out of the middle. The buyer and seller then argue their claims to the court. We do not track how long that takes in any Richmond-area court, and we will not guess.

What the regulation still requires while a dispute is open

The Real Estate Board’s rule keeps working while the argument goes on. Under 18VAC135-20-181, the money must stay in the federally insured escrow account, the firm must keep a balance that covers all funds it holds for clients, and the broker may not pay a commission out of the deposit before the transaction is consummated unless all principals have agreed otherwise in writing. Closing costs such as appraisal and credit report fees may not be deducted without the same written agreement. The Virginia Real Estate Board, which licenses brokers and firms, issued that regulation. Our companion article lists the escrow rules in full.

If you are in a dispute now: a plain order of steps

• Gather the contract, every addendum, and every notice you sent or received, with dates.
• Check each contingency deadline against the date you gave notice, and how notice was delivered.
• Ask the broker in writing whether a notice has been or will be sent, and what delivery method it will use.
• If a 15-day notice arrives, calendar the last day and get legal advice before it passes.
• Do not sign a release you have not had read by an attorney.

Two more guides: the final walk-through and any escrow holdback are two later steps worth reading about before you go under contract. If you are shopping, a saved property search lets you start from real listings, our buyer page explains how we work with buyers, and our preferred lenders can help you plan which dates your loan must meet.