The TAR 1904 release of earnest money form is a one-page Texas Association of REALTORS® document that authorizes the escrow agent to disburse the earnest money after a contract terminates, and, in the same stroke, releases the buyer, seller, both brokers, the title company, and the escrow agent from all liability under the contract. To use it correctly, you copy the property address from the contract, name the escrow agent, list disbursements that total the exact balance held, read the release language in Section A carefully, and collect signatures from the buyer, the seller, and both brokers before submitting the form to the title company.
What the Form Actually Does
The notice at the top of TAR 1904 is written in capital letters for a reason. Signing the form does two things at once: it tells the escrow agent how to split the money, and it releases every signing party from any and all liability under the terminated contract. That second part is broad and permanent.
If you have an unresolved claim against the seller for failing to disclose a defect, or against a broker for misrepresentation, signing this form extinguishes it along with the escrow question. The form’s own notice tells you to consult an attorney before signing if you don’t understand the effect. Where a buyer wants the deposit back but also intends to pursue a separate claim against the seller, an attorney can draft a modified release that carves out the additional claim while still authorizing disbursement.
Where the Form Comes From
TAR 1904 is not a public government form. The Texas Association of REALTORS® publishes it exclusively for member use, and a notice across the top of the form states that use by non-members is not authorized.1Texas REALTORS®. Forms Your agent pulls it from the TAR member portal and sends it to you for signature.
This is different from the contract forms adopted by the Texas Real Estate Commission, which are public records that license holders are required to use.2Texas Real Estate Commission. Contracts TAR forms are voluntary supplements. Your agent may use TAR 1904, or the title company may provide its own release form. Either way, the escrow agent needs signed authorization before releasing funds.
Filling In the Form
Start at the top with the property address. Copy it exactly as it appears on the executed sales contract, including unit numbers, lot descriptions, and any other identifying detail. A mismatched address can cause the escrow officer to flag the form as relating to a different file.
The body of the form has two working sections. Section A is the mutual release described above. Section B is the disbursement instructions: you name the escrow agent (usually the title company) in the blank provided, then use the disbursement lines to list each recipient and the dollar amount going to them. The form provides up to four lines.
The dollar amounts in Section B must total the exact balance the escrow agent holds. If the title company’s records show $5,000 in escrow and the form accounts for only $4,800, expect the agent to reject it and ask for a corrected version. Pull the figure from your earnest money receipt, or call the escrow officer directly to confirm the current balance, before you fill anything in. Fees or expenses paid from escrow since the deposit went in may have reduced the balance.
Common splits include the full amount going to the buyer after an option-period termination, or the seller keeping a portion while the buyer receives the rest. Every dollar of the held balance needs to appear somewhere on the form.
Who Signs
Four categories of parties sign: the buyer, the seller, the cooperating (buyer’s) broker, and the listing (seller’s) broker. Each signature line has a date field. If there are multiple buyers or sellers on the contract, each individual signs on a separate line.
The broker signatures confirm that neither brokerage has an outstanding claim to the earnest money, such as a commission dispute or reimbursement for marketing expenses. Missing broker signatures are one of the most common reasons a release gets delayed. Even when buyer and seller agree on the split, the title company cannot process the release until both brokers sign. Have your agent coordinate all four signatures before submission rather than sending the form around piecemeal.
Most agents route the form through an electronic signature platform such as DocuSign or Dotloop, which timestamps each signature and creates an audit trail. Wet-ink signatures on a printed copy are still accepted; make sure the escrow agent receives the original or a clear scan. Once signatures are verified and the disbursement math matches the title company’s records, checks or wire transfers go out to the listed recipients.
Who Is Actually Entitled to the Money
What you put in Section B depends on when and why the contract terminated.
If the buyer terminates during the option period, the buyer gets the earnest money back in full. The option period is a negotiated window after execution during which the buyer holds an unrestricted right to walk away for any reason, provided the buyer paid the option fee on time.3Texas Real Estate Research Center. Option Period Basics The option fee itself is separate and goes to the seller regardless. This is the cleanest scenario and where TAR 1904 usually gets signed quickly.
Outside the option period, a buyer cannot simply terminate and expect a refund. Termination at that stage requires a contractual basis, such as the failure of a financing contingency or the seller’s inability to deliver clear title. When the buyer defaults after all contingencies have been satisfied, the seller is typically entitled to keep the earnest money as liquidated damages under the contract terms.3Texas Real Estate Research Center. Option Period Basics
When the Other Party Won’t Sign
Most earnest money disputes come down to one party refusing to sign the release. The standard TREC residential contract addresses this in Paragraph 18.
Upon termination, either party or the escrow agent may send a release of earnest money to both sides. If one party refuses to sign, the other can submit a written demand directly to the escrow agent. The escrow agent then sends a copy of that demand to the non-responding party. If the escrow agent receives no written objection within 15 days, the agent may disburse the earnest money to the party who made the demand, minus any unpaid expenses incurred on that party’s behalf.4National Investors Title Insurance Company. Real Estate Earnest Money Contract Issues
The 15-day window is the number to track. If the other party objects in writing within that period, the escrow agent cannot release the funds and the money stays in escrow. From there, the parties either negotiate a compromise and sign a release with an agreed split, or one side files suit. Title companies caught between disputing parties will often interplead the funds, depositing the money with the court and asking to be dismissed from the case.
If It Ends Up in Court
For earnest money amounts under $20,000, Texas justice courts (small claims) have jurisdiction, which means a faster and less expensive process than district court.5Texas Law Help. How to Sue in Justice Court (Small Claims Court) Named defendants typically include the party refusing to sign and the title company holding the funds.
The practical leverage in most disputes comes from Paragraph 18 rather than a separate statute. If you made a written demand through the escrow agent and the other party failed to object within 15 days, the escrow agent already has authority to release the funds to you. A party who files a written objection just to stall, with no legitimate contractual basis for claiming the money, risks being ordered to pay attorney fees when the court resolves the matter.
Texas Business and Commerce Code § 27.01 addresses fraud in real estate transactions, specifically false representations and broken promises made to induce someone into a contract.6State of Texas. Texas Business and Commerce Code 27-01 It does not create a standalone penalty for refusing to sign an earnest money release. A party defrauded during the transaction could pursue actual damages and attorney fees under that statute, but the remedy targets the fraud, not the post-termination release process.
What Delays a Release Most Often
Three things account for most of the holdups. First, a mismatch between the form and the escrow agent’s records: check the property address character by character against the contract, and verify the earnest money balance directly with the title company. Second, missing broker signatures: get all four before submitting. Third, signing Section A without reading it. If you have any unresolved grievance beyond the deposit itself, whether an undisclosed foundation issue, a misrepresented survey, or a commission dispute, resolve it or carve it out before you sign. Once the release is executed, it covers everything under the contract.