Texas · TREC 20-19 ¶18Texas earnest money release after termination
When a Texas contract terminates, either party or the escrow agent sends a release of earnest money and both parties sign it (TREC 20-19 ¶18C). If one party will not sign, the other may make a written demand; the escrow agent sends a copy to the other party, and if no written objection arrives within 15 days, it may pay out to the party who made the demand, less unpaid expenses. A party who wrongfully refuses to sign a release within 7 days of the request is liable for damages, the earnest money, attorney's fees and costs.
Step by step (¶18C–E)
After termination
Release
Either party or the escrow agent sends a release of earnest money to each party; the parties sign counterparts and deliver them to the escrow agent.
If someone will not sign
Written demand
Either party may make a written demand to the escrow agent for the earnest money; the agent promptly sends a copy to the other party.
15 days
Objection window
If the escrow agent receives no written objection within 15 days, it may disburse to the party who made the demand, reduced by unpaid expenses incurred for the party receiving it. An objection is effective when the escrow agent receives it.
7 days
Refusing to sign
A party who wrongfully fails or refuses to sign an acceptable release within 7 days of receiving the request is liable for damages, the earnest money, reasonable attorney's fees and all costs of suit (¶18D).
What comes out of the money (¶18A–B)
Release of liability
If there is no closing, the escrow agent may require a written release of its own liability from all parties before releasing funds.
Expenses
It may require payment of unpaid expenses incurred for a party and deduct authorized expenses from the money payable to that party.
No interest, no bank risk
The escrow agent is not liable for interest or for loss caused by the failure of the bank holding the money, unless that bank is the escrow agent.
Option fee is different
The option fee goes to the seller; the release concerns the earnest money.
What the TC tracks
- The termination notice and its delivery date – the release follows it.
- The release sent to both parties, and the date each one receives it (the 7-day clock).
- If a demand is made: the date the escrow agent sends it on, and the 15-day objection window.
- Notices go out under ¶21 – to the party or the party's agent.
Questions about Texas earnest money release
How do you get earnest money back in Texas after terminating?
Both parties sign a release of earnest money; if one will not, the other makes a written demand to the escrow agent, which may pay out if no written objection arrives within 15 days.
How long does the other party have to object to an earnest money demand in Texas?
15 days after the escrow agent provides the copy of the demand, under ¶18C of TREC 20-19.
What if a seller refuses to sign the earnest money release?
A party who wrongfully refuses to sign an acceptable release within 7 days of the request is liable for damages, the earnest money, reasonable attorney's fees and costs (¶18D).
Can the title company deduct fees from the earnest money?
Yes, the escrow agent may deduct authorized expenses incurred for the party entitled to the money and require payment of unpaid expenses.
Does the escrow agent decide who gets the earnest money?
No. The escrow agent is not a party to the contract; it follows the signed release, the unopposed demand, or a court or mediation outcome.
Texas guides
After a termination, add the release and the 15-day objection window as dated tasks on the deal in ClosingCode, with reminders.
Start free trialSource: Texas Real Estate Commission, TREC No. 20-19 One to Four Family Residential Contract (Resale) (effective July 1, 2026), ¶18A–E and ¶21.
General information, not legal advice. ClosingCode is software; it is not a law firm, brokerage or escrow agent, and it is not affiliated with TREC.