Florida Real Estate Escrow Rules: Every Deadline and Dollar Amount on the Exam (2026)
Why Escrow Questions Cost More Points Than Students Expect
Florida real estate escrow rules fall under Brokerage Activities and Procedures, which carries 12% of the exam. That is the single heaviest topic. And within that 12%, escrow is the most number-heavy subcategory. Three business days here. Fifteen business days there. $1,000 in one account. $5,000 in another. $50,000 cap on a specific procedure. Students who mix up even one of these numbers lose a question they could have answered correctly.
The problem is not that the rules are complicated. Each one, individually, is straightforward. The problem is that there are a lot of them, and the exam tests the specific numbers, not the general concepts. Knowing that "deposits must be made quickly" is worth zero points. Knowing that deposits must be made by the end of the third business day after the broker receives the funds is worth one point. The difference between those two sentences is the difference between a guess and a correct answer.
This guide gives you every deadline, every dollar amount, and every procedure the exam tests on escrow and trust accounts. It is the kind of content you bookmark and review the night before your exam.
The short version: Deposits go into escrow by the end of the 3rd business day after the broker receives them (not after the sales associate receives them). Disputes trigger a 15-business-day FREC notification and must be resolved through one of four procedures within 30 business days. Commingling is mixing funds (accidental). Conversion is using funds (theft). Personal funds are limited to $1,000 in sales escrow and $5,000 in property management escrow. Interest-bearing accounts require written consent of all parties.
Exam Weight: 12% (Brokerage Activities and Procedures) | Difficulty: High | Math: None
What This Guide Covers
- The 3rd Business Day Deposit Rule
- Where Can Escrow Deposits Go in Florida?
- The Four Escrow Dispute Resolution Options
- 15 Business Day FREC Notification Requirement
- Monthly Reconciliation Requirements
- Commingling vs Conversion: Definitions, Differences, and Exam Traps
- Interest-Bearing Escrow Accounts in Florida
- Personal Funds Limits in Escrow Accounts
- Penalties for Escrow Violations in Florida
- The Real Estate Recovery Fund
- 2026 Update: FinCEN Residential Real Estate Reporting Rule
- Timeline: Contract to Deposit to Closing
- 5 Escrow Exam Scenarios with Breakdowns
- Frequently Asked Questions
The 3rd Business Day Deposit Rule: When the Clock Starts
This is the single most tested escrow fact on the Florida real estate exam. Get the number right and you get a free point. Get it wrong and you miss what should be the easiest escrow question on the test.
Under Rule 61J2-14.008(3), FAC, a broker must deposit escrow funds no later than the end of the third business day following the broker's receipt of the deposit.
But there is a step before that. Under Rule 61J2-14.009, every sales associate or broker associate who receives a deposit must deliver it to their employing broker by the end of the next business day following receipt. Two separate deadlines. Two separate clocks.
How the Clock Works
Sales associate receives deposit on Thursday:
- Sales associate must deliver to broker by: end of Friday (next business day)
- Broker must deposit into escrow by: end of Wednesday (third business day after broker's receipt, assuming broker receives it Friday: Monday = day 1, Tuesday = day 2, Wednesday = day 3)
What counts as a business day: Saturdays, Sundays, and legal holidays are not business days. If day three falls on a Saturday, the deadline rolls to Monday.
When the clock starts: The clock for the three-day rule begins when the broker receives the deposit, not when the sales associate receives it from the buyer. This distinction shows up on the exam. If the question says "a sales associate receives a deposit," the three-day clock has not started yet. The sales associate has until the next business day to get it to the broker. Then the broker's three-day clock begins.
Postdated Checks
A postdated check is treated as a promissory note. It must be disclosed to all parties and noted on the contract. The broker holds the check securely until it becomes current. The three-business-day deposit rule applies from when the check becomes current, not from the date the broker received it.
Where Can Escrow Deposits Go in Florida?
The exam tests whether you know the authorized depositories, not just that deposits "go into escrow." Under Rule 61J2-14.010(1), deposits may be placed in:
- The broker's escrow (trust) account at an insured Florida bank, savings and loan, credit union, or trust company. At least one broker must be a signatory on the account.
- A title company escrow account with trust powers. This is the most common option in Florida, particularly in South Florida where title companies handle most closings.
- An attorney's trust account held by a Florida Bar-licensed attorney.
- A designated escrow agent named in the contract.
Can the Deposit Go Directly to the Seller?
No. Not when a broker is involved. Under Section 475.25(1)(k), Florida Statutes, the broker has a statutory obligation to place all entrusted funds in an authorized escrow account. There is no provision for delivering deposits directly to the seller.
If the exam describes a seller asking the broker to hand over the deposit before closing, the correct answer is that the broker must refuse. The deposit stays in escrow until closing or until an authorized disbursement occurs.
The Four Escrow Dispute Resolution Options
When a broker receives conflicting demands on escrow funds, or has good-faith doubt about who is entitled to the money, the broker must resolve the dispute through one of four specific procedures. No others exist. The broker cannot simply pick a side and disburse the funds.
1. Escrow Disbursement Order (EDO) from FREC
The broker requests FREC to determine who gets the money. This is the simplest and least expensive option for smaller disputes.
The $50,000 cap: FREC will not issue an EDO for disputes exceeding $50,000. For amounts above $50,000, the broker must use interpleader or another method. This cap is tested on the exam.
If the dispute settles or goes to court before the EDO is issued, the broker must notify FREC in writing within 10 business days.
2. Mediation
Requires the written consent of all parties. Must be completed within 90 days following the last demand. If mediation is not completed within 90 days, the broker must immediately pursue one of the other three options.
Mediation is non-binding unless the parties reach a settlement agreement. Costs are shared as agreed to in writing.
3. Arbitration
Requires the consent of all parties (consent, not necessarily written consent). The arbitrator's decision is binding. Faster than court but more formal than mediation.
4. Interpleader (Court Action)
The broker files an interpleader action in circuit court, depositing the disputed funds with the clerk of courts. The court then decides who gets the money.
This is the required method for disputes over $50,000 (since FREC will not issue an EDO above that amount). Also appropriate when parties cannot agree to mediation or arbitration.
The Safe Harbor Provision
This is worth knowing for the exam. If a broker promptly employs one of these four procedures and abides by the resulting order or judgment, no administrative complaint may be filed against the broker for failure to account for the escrowed property. Following the process correctly protects the broker.
When the Broker Does NOT Need to Use These Procedures
There is one important exception that the exam tests. If a buyer in good faith fails to satisfy the financing clause, the broker may return the deposit to the buyer without notifying FREC and without initiating any settlement procedure. Students who think FREC must always be notified in every escrow situation miss this question.
15 Business Day FREC Notification Requirement
Under Rule 61J2-10.032(1)(a), FAC, when a broker receives conflicting demands on funds held in the broker's trust account, the broker must notify FREC in writing within 15 business days.
After notification, the broker must institute one of the four settlement procedures within 30 business days after the last conflicting demand.
Two deadlines. Fifteen and thirty. The exam will give you a scenario with conflicting demands and ask which deadline applies. Know both.
When the 15-Day Rule Does NOT Apply
The notification requirement only applies when the broker holds the disputed funds. If the funds are held by a title company or attorney, the broker does not need to notify FREC. The title company or attorney handles the dispute under their own regulatory framework.
Monthly Reconciliation Requirements for Florida Escrow Accounts
Under Rule 61J2-14.012, FAC, brokers must perform a written reconciliation of their escrow accounts once per month.
What Must Be Reconciled
The broker's total trust liability (what they owe to all parties with money in escrow) must be compared with the reconciled bank balance of all trust accounts. The reconciliation must include:
- Date of the reconciliation
- Bank name, account name, and account number
- Account balance and date
- Deposits in transit
- Outstanding checks (identified by date and check number)
- Itemized list of the broker's trust liability
- Date of receipt and source of all funds
Who Signs It
This detail catches students. An accountant or bookkeeper may prepare the monthly reconciliation. But the broker must personally review, sign, and date every reconciliation statement. Delegating the preparation is fine. Delegating the signature is not.
When Balances Do Not Match
If the reconciled bank balance does not match the total trust liability, the reconciliation must include an explanation and a description of corrective action taken. Returned checks (NSF) or negative balances must also be disclosed with causes and corrections.
Record Retention
All escrow records, including deposit slips, account statements, reconciliations, and transaction agreements, must be retained for 5 years after the conclusion of the transaction.
Commingling vs Conversion: Definitions, Differences, and Exam Traps
If the exam gives you a scenario about escrow fund mishandling, it is testing one of two things: commingling or conversion. The distinction matters because the penalties are different and the exam expects you to know which is which.
What Is Commingling?
Commingling is mixing a client's or customer's money with the broker's own personal or business funds. It can be accidental.
Examples:
- Depositing a buyer's earnest money into the broker's operating account instead of the escrow account
- Keeping more than $1,000 of personal funds in a sales escrow account
- Depositing rental income collected for a client into the broker's personal checking account
What Is Conversion?
Conversion is the unauthorized personal use of client or customer money that was entrusted to the broker. It is not accidental. It is theft.
Examples:
- Using a buyer's deposit to pay the broker's office rent
- Taking escrow funds to cover personal expenses with plans to "replace it later"
- Diverting deposit funds to personal investments
The Key Difference the Exam Tests
| Commingling | Conversion | |
|---|---|---|
| What it is | Mixing funds | Using funds |
| Intent | May be accidental | Intentional misuse |
| Severity | Serious violation | More severe (fraud/theft) |
| Criminal exposure | Misdemeanor under Section 475.42 | Potential felony under Florida theft statutes |
| Typical FREC penalty | Fine + suspension | Revocation |
The Exam Trap
The exam describes a broker who deposits a client's $10,000 into the broker's personal account and then uses $3,000 to pay office rent. Is this commingling, conversion, or both?
The answer: both. Depositing the funds into the personal account is commingling (mixing). Using $3,000 for rent is conversion (unauthorized use). If the exam asks which violation occurred, and both is an answer choice, both is correct. If it asks which is the more serious violation, conversion is always more serious than commingling.
One more scenario that shows up regularly: a broker "borrows" $5,000 from escrow with the full intention of paying it back next week. Is this conversion? Yes. Intent to repay does not change the fact that the funds were used without authorization. Conversion is conversion regardless of whether the broker plans to return the money.
Interest-Bearing Escrow Accounts in Florida
Under Rule 61J2-14.014, FAC, a broker may place escrow funds in an interest-bearing account. But there are specific requirements.
The Requirements
- Written permission of ALL parties to the transaction is required
- The written agreement must specify who gets the interest
- The written agreement must specify when the interest is disbursed
Without written consent of all parties, escrow funds must be placed in a non-interest-bearing account. The default is non-interest-bearing. This is a common exam question: "Under what circumstances may a broker place escrow funds in an interest-bearing account?" The answer is always "with written consent of all parties."
Who Gets the Interest?
Whoever the parties agree to in writing. The buyer can get it. The seller can get it. The broker can get it. There is no default rule. The parties decide.
If the broker is designated to receive the interest, the principal (escrow amount) is transferred to a non-interest-bearing account for disbursement and the interest goes directly to the broker's operating account. If another party gets the interest, both principal and interest are transferred together.
Personal Funds Limits in Florida Escrow Accounts
Brokers are allowed to keep a small amount of personal or brokerage funds in their escrow accounts. This is not commingling. It is specifically authorized by statute to cover bank fees and maintain minimum balances so that client funds are never depleted by service charges.
But there are strict limits. Under Rule 61J2-14.010(2), FAC, and Section 475.25(1)(k):
| Account Type | Maximum Personal Funds |
|---|---|
| Sales escrow account | $1,000 |
| Property management escrow account | $5,000 |
Exceeding these limits constitutes commingling, even though keeping funds within the limits does not.
The Exam Trap: Reversing the Numbers
Students frequently confuse which limit applies to which account type. The property management limit is higher ($5,000) because property management accounts handle ongoing expenses like maintenance, repairs, and vendor payments. Sales escrow accounts hold deposits that sit untouched until closing, so the maintenance buffer is smaller ($1,000).
If the exam says a broker has $3,000 of personal funds in a sales escrow account, that is commingling. $3,000 is within the $5,000 property management limit but exceeds the $1,000 sales limit. The account type determines which limit applies.
Penalties for Escrow Violations in Florida
FREC can impose a range of penalties for escrow violations under Section 475.25, Florida Statutes:
- Administrative fine up to $5,000 per count or separate offense
- Probation
- License suspension for up to 10 years
- License revocation
- Denial of license application
Specific Penalty Ranges (Rule 61J2-24.001)
| Violation | First Offense | Repeat Offense |
|---|---|---|
| Failure to account for escrowed property | $1,000 to $2,500 fine + 30 to 90 day suspension | $2,000 to $5,000 fine + suspension to revocation |
| Failure to deposit immediately | $1,000 to $2,500 fine + suspension to revocation | $2,500 to $5,000 fine + 2-year suspension to permanent revocation |
Criminal Penalties
Any violation of Section 475.42 (which includes escrow violations) is a misdemeanor of the second degree: up to 60 days in jail and a $500 fine. However, conversion of escrow funds may also be prosecuted under Florida's general theft statutes, where amounts over $300 constitute a felony.
The Grace Period
There is one nuance that softens the rules slightly. Under Section 475.25(1)(k), a broker has a 30-day grace period from the date the last reconciliation was performed (or should have been performed) to correct escrow errors, provided there is no shortage of funds and the errors do not threaten economic harm to the public. This is not a free pass. It is a narrow window for administrative corrections only.
Emergency Powers
Under Section 475.5017, DBPR can seek immediate injunctive relief in circuit court and may impound property and appoint receivers for the broker's business in cases of escrow theft. These are not theoretical. They are used when a broker is actively misappropriating funds.
The Real Estate Recovery Fund: What It Covers
The Recovery Fund is not an escrow rule, but it often appears alongside escrow questions on the exam because both involve consumer protection around money in real estate transactions. The Florida-specific content guide covers the Recovery Fund alongside every other state-specific topic in one comprehensive reference.
Under Section 475.482, Florida Statutes, the Recovery Fund compensates members of the public who suffer monetary damages due to acts committed by licensed Florida real estate brokers or sales associates.
Maximum payouts:
- $50,000 per transaction (regardless of the number of claimants)
- $150,000 per licensee (aggregate of all claims against that licensee)
Prerequisites: The claimant must have obtained a final court judgment, the judgment must be based on a real estate brokerage transaction, and the claimant must have exhausted all other remedies.
Consequence for the licensee: Upon payment from the Recovery Fund, the licensee's license is automatically suspended. It cannot be reinstated until the licensee has repaid the full amount plus interest.
What it does NOT cover: Punitive damages, attorney fees, court costs, or pain and suffering. Only actual compensatory damages.
These four numbers ($50,000, $150,000, and the fact that the license is suspended and repayment is required) are the only Recovery Fund facts the exam tests. Memorize them.
2026 Update: FinCEN Residential Real Estate Reporting Rule
This is new as of March 1, 2026 and may begin appearing on exam questions as the DBPR updates its test bank. Even if it does not appear on your specific exam, understanding it helps you answer related closing procedure questions.
What the Rule Requires
The Financial Crimes Enforcement Network (FinCEN) now requires reporting of certain residential real estate transfers. All four conditions must be met:
- The transfer involves residential real property (1 to 4 family homes, condos, vacant land intended for residential construction)
- The transfer is non-financed (no qualifying institutional lender, meaning all-cash, seller financing, or private financing)
- The transfer is to a legal entity or trust (not to an individual person)
- No applicable exemption applies
Who Files
A seven-tier "cascade" determines who is responsible for filing: starting with the closing agent named on the settlement statement, then the person who prepared the settlement statement, then the person who filed the deed, and so on down the list. Only one person files per transaction.
Filing Deadline
The later of the last day of the month following the month of closing, or 30 calendar days after the date of closing. In practice, this means 30 to 60 days depending on when in the month the closing occurs.
What This Means for the Exam
Do not overthink this for exam purposes. The core escrow rules have not changed. What changed is that settlement agents in Florida now have an additional compliance layer for all-cash entity purchases. If the exam references FinCEN reporting, the question will likely test whether you know the basic trigger (non-financed transfers to entities or trusts) and who is responsible for filing (the settlement/closing agent).
Timeline: Contract to Deposit to Closing
Every deadline in one place. This is the reference table to review the night before your exam.
| Event | Deadline |
|---|---|
| Contract executed | Day 0 |
| Sales associate delivers deposit to broker | End of next business day after receipt |
| Broker deposits into escrow account | End of 3rd business day after broker's receipt |
| Broker requests verification (if third-party escrow) | Within 10 business days after deposit due date |
| Broker provides confirmation to seller's broker | Within 10 business days of sending request |
| Conflicting demands received: notify FREC | Within 15 business days |
| Initiate settlement procedure | Within 30 business days of last demand |
| Mediation (if chosen) must be completed | Within 90 days of last demand |
| FREC will not issue EDO above | $50,000 |
| Monthly escrow reconciliation | Once per month, broker must sign |
| Escrow record retention | 5 years after transaction concludes |
Print this table. The numbers will not change between now and exam day.
5 Escrow Exam Scenarios with Breakdowns
Test yourself on these five scenarios. Each targets a different escrow trap that shows up on the Florida real estate exam. Cover the answer, work through the problem, then check.
Scenario 1: The Business Day Count
A sales associate receives an earnest money deposit from a buyer on Wednesday afternoon. The sales associate delivers the deposit to the employing broker on Thursday morning. By when must the broker deposit the funds into the escrow account?
Answer: By the end of the following Tuesday.
The broker received the deposit Thursday. The three business days are Friday (day 1), Monday (day 2), Tuesday (day 3). The deposit must be in the escrow account by end of day Tuesday.
The mistake students make: They start counting from Wednesday, when the sales associate received the deposit. But the three-day clock does not start until the broker receives it. The sales associate has a separate deadline (next business day), and the broker's clock begins independently when the deposit reaches the broker's hands. Two clocks. Two starting points.
Scenario 2: Commingling, Conversion, or Both?
A broker deposits a buyer's $15,000 earnest money deposit into the broker's personal checking account. The broker then uses $4,000 from that account to pay the brokerage's monthly office rent. What violations has the broker committed?
Answer: Both commingling and conversion.
Depositing the buyer's funds into a personal account is commingling (mixing client funds with personal funds). Using $4,000 of those funds for rent is conversion (unauthorized use of entrusted funds).
Why this distinction matters: The exam may offer four answer choices: commingling only, conversion only, both commingling and conversion, or no violation if the broker intends to replace the funds. The answer is both. And the "intends to replace" choice is always wrong. Intent to repay does not cure conversion. If you took the money without authorization, it is conversion. Period.
Scenario 3: Which Dispute Resolution Option?
A broker holds $75,000 in escrow. The buyer and seller submit conflicting demands. The broker notifies FREC within 15 business days and now needs to resolve the dispute. Can the broker request an Escrow Disbursement Order from FREC?
Answer: No. The amount exceeds $50,000.
FREC will not issue an EDO for disputes exceeding $50,000. For this amount, the broker must pursue interpleader (court action), or obtain consent from all parties for mediation or arbitration.
What the exam is testing here: Whether you know the $50,000 cap. Many students memorize the four dispute resolution options but forget that one of them has a dollar limit. If the question includes a dollar amount above $50,000 and offers EDO as an answer choice, it is a trap. The amount disqualifies it.
Scenario 4: The Personal Funds Limit
A broker maintains $3,500 of personal funds in the brokerage's sales escrow account to cover bank fees and maintain the minimum balance. Has the broker committed a violation?
Answer: Yes. This exceeds the $1,000 limit for sales escrow accounts.
The maximum personal funds allowed in a sales escrow account is $1,000. The $5,000 limit applies only to property management escrow accounts. $3,500 exceeds the sales limit and constitutes commingling, even though the broker's intention was legitimate.
$3,500 is a safe number or a violation depending on one word in the question: "sales" or "property management." $3,500 is well within the $5,000 property management limit. But this is a sales escrow account. The $1,000 limit applies. Students who memorized "$5,000" without noting which account type it applies to will pick "no violation." That is wrong. The account type determines the limit. Sales escrow = $1,000. Property management escrow = $5,000. Know both numbers and which goes with which.
Scenario 5: The Exception That Changes Everything
A buyer and seller enter into a contract with a financing contingency. The buyer applies for a mortgage but is denied. The buyer provides the denial letter to the broker and requests the return of the earnest money deposit. The seller does not object. Must the broker notify FREC before returning the deposit?
Answer: No.
When a buyer in good faith fails to satisfy the financing clause, the broker may return the deposit to the buyer without notifying FREC and without initiating any of the four settlement procedures. This is a specific exception to the dispute resolution rules.
Every other scenario in this guide required FREC notification. This one does not. Students who memorized "conflicting demands = notify FREC within 15 business days" apply that rule to every escrow return scenario. But this is not a dispute. The buyer failed to secure financing. The contract's contingency clause governs the outcome. The seller has no valid claim to the deposit under the financing contingency. No conflicting demands, no FREC notification required. If you picked "yes, notify FREC," you lost a point to a question designed to test whether you know the exception, not just the rule.
What to Study Next
If you got all five scenarios right, escrow is not your problem area. Move to brokerage relationships (7% of the exam) or review the tricky question techniques that apply to every topic.
If you got three or four right but mixed up a number (the $50,000 EDO cap, the $1,000 vs $5,000 personal funds limits, or the 15 vs 30 business day deadlines), review the timeline table above and retake the scenarios in two days. The concepts are there. The specific numbers need one more pass.
If you missed two or more, this topic needs focused repetition. Escrow is pure memorization. The numbers do not have intuitive logic behind them. Print the timeline table, quiz yourself on the numbers daily for one week, and come back to the scenarios until all five feel automatic.
How Pass Florida Drills Escrow Until the Numbers Stick
Escrow is a memorization topic disguised as a conceptual one. The concepts are simple. The numbers are what trip students up. Pass Florida is designed to make those numbers automatic before exam day.
Adaptive targeting detects whether you confuse the $1,000 sales limit with the $5,000 property management limit, whether you mix up 15 business days (FREC notification) with 30 business days (settlement procedure), and whether you know the $50,000 EDO cap. When you get one of these wrong, the engine feeds you more questions on that specific number until your recall is consistent.
Scenario-based questions put you in situations where you have to apply the rules, not just recall them. You are not asked "How many business days does a broker have to deposit escrow funds?" You are given a scenario with a specific day of the week and asked when the deadline falls. That is how the real exam tests it, and that is how the app practices it.
The Math Coach handles proration calculations that involve escrow disbursements at closing. When you miss a proration question, it walks through each step so you can see where your setup went wrong.
Download Pass Florida and take a free diagnostic across all 19 content areas. It will show you whether escrow rules are a strength or a gap before you spend a single hour on this topic.
Frequently Asked Questions
How many business days does a broker have to deposit escrow funds in Florida?
Three business days. Under Rule 61J2-14.008(3), a broker must deposit escrow funds no later than the end of the third business day following the broker's receipt of the deposit. Saturdays, Sundays, and legal holidays are not counted as business days. Separately, a sales associate must deliver the deposit to the broker by the end of the next business day after receiving it.
What are the four escrow dispute resolution options in Florida?
The four options are: Escrow Disbursement Order (EDO) from FREC, mediation, arbitration, and interpleader (court action). FREC will not issue an EDO for disputes exceeding $50,000. Mediation requires written consent of all parties and must be completed within 90 days. Arbitration requires consent of all parties and is binding. Interpleader involves filing a court action and depositing funds with the clerk of courts.
What is the difference between commingling and conversion in Florida real estate?
Commingling is mixing client funds with the broker's personal or business funds. It can be accidental. Conversion is the unauthorized personal use of client funds entrusted to the broker. Conversion is intentional and is treated as theft. Both are violations, but conversion is more severe and typically results in license revocation. A broker who deposits client funds into a personal account has committed commingling. If the broker then spends those funds, it becomes conversion.
How much personal money can a broker keep in a Florida escrow account?
Up to $1,000 in a sales escrow account and up to $5,000 in a property management escrow account. These limits allow brokers to cover bank service charges and maintain minimum balances without depleting client funds. Exceeding these limits constitutes commingling, even if the broker's intention was to cover fees.
When must a broker notify FREC about an escrow dispute?
Within 15 business days of receiving conflicting demands on funds held in the broker's trust account. After notification, the broker must institute one of four settlement procedures within 30 business days of the last conflicting demand. The notification requirement only applies when the broker holds the funds. If a title company or attorney holds the funds, the broker does not need to notify FREC.
What is an Escrow Disbursement Order (EDO) in Florida?
An EDO is an order issued by FREC that determines who is entitled to disputed escrow funds. A broker requests it when there are conflicting demands on the deposit. FREC will not issue an EDO for disputes exceeding $50,000. If the dispute settles or goes to court before the EDO is issued, the broker must notify FREC in writing within 10 business days.
Can a Florida broker put escrow funds in an interest-bearing account?
Yes, but only with written permission of all parties to the transaction. The written agreement must specify who receives the interest and when it is disbursed. Without written consent of all parties, escrow funds must be placed in a non-interest-bearing account. The broker may be designated to receive the interest if both buyer and seller agree in writing.
What are the penalties for escrow violations in Florida?
FREC can impose fines up to $5,000 per offense, probation, license suspension for up to 10 years, or license revocation. First offenses for failure to deposit escrow funds typically result in a $1,000 to $2,500 fine plus a 30 to 90 day suspension. Repeat offenses can result in permanent revocation. Criminal penalties under Section 475.42 include up to 60 days in jail and a $500 fine, though conversion may be prosecuted as felony theft.
What is the Real Estate Recovery Fund maximum payout in Florida?
$50,000 per transaction and $150,000 per licensee (aggregate of all claims). The Recovery Fund compensates members of the public who suffer monetary damages due to acts by licensed real estate professionals. Upon payment, the licensee's license is automatically suspended until the full amount plus interest is repaid to the Fund.
Does a broker need to notify FREC when returning a deposit under a failed financing contingency?
No. When a buyer in good faith fails to satisfy the financing clause, the broker may return the deposit to the buyer without notifying FREC and without initiating any settlement procedure. This is a specific exception to the escrow dispute rules. FREC notification is required only when there are conflicting demands on the funds.
Related:
The 19 Topics on the Florida Real Estate Exam and How Much Each Is Weighted
How to Pass the Florida Real Estate Exam on Your First Try
Florida Brokerage Relationships Explained: Transaction Broker vs Single Agent vs No Brokerage
How to Read Tricky Questions on the Florida Real Estate Exam
Florida Real Estate Exam Math: Every Formula You Need to Know
Florida Real Estate Contracts Guide: Every Rule the Exam Tests
The Florida-Specific Content Your Prep Course Probably Skipped