QUICK ANSWER
A Florida sales associate must deliver a deposit to the broker by the end of the next business day. The broker's escrow placement deadline is the end of the third business day after receipt, including receipt by an associate. Keep an accurate record of each deposit and withdrawal, reconcile trust accounts monthly, and retain brokerage records for at least five years. The broker must be a signatory on the escrow accounts and must review, sign and date the reconciliation.
A deposit can reach the right bank on time and still be recorded incorrectly. For Florida exam questions, separate three jobs: getting the money into escrow, showing whose money it is, and releasing it only with proper authority.
The Department of Business and Professional Regulation (DBPR) sales associate exam outline places escrow within Brokerage Activities and Procedures, a 12% subject area. That percentage covers the whole area, not escrow alone. The rules below come from Florida Real Estate Commission (FREC) escrow rules and Chapter 475.
In this guide
- Deposit and withdrawal records
- Deadlines and a Friday deposit example
- Account holders and signatories
- Disputes and settlement procedures
- Personal funds, commingling and conversion
- Interest and other deposit issues
- Worked scenarios
- Frequently asked questions
How to record escrow deposits and withdrawals
Use a chronological record of receipts and disbursements, supported by records showing each client's or transaction's balance. A bank statement alone cannot tell you how much belongs to each person. A monthly reconciliation checks those records; it does not replace recording the underlying transactions.
Rule 61J2-14.012 requires an accurate account of each deposit and each bank account, supporting documents, and a written monthly reconciliation. It does not prescribe one software product or require every brokerage to use the same record names.
| Record | Question it answers | What to include |
|---|---|---|
| Receipts and disbursements journal | What entered or left the account, in date order? | Date, amount, source or payee, transaction reference and running balance |
| Individual transaction or client ledger | Whose money is held, and how much remains? | Each receipt and authorized payment associated with that transaction or client |
| Bank statement and supporting documents | What cleared the bank, and why was it paid? | Statements, deposit slips, checks, agreements and payment authority |
| Monthly reconciliation | Do the bank balance and the broker's records agree? | Adjusted bank balance, itemized trust liability, differences and corrective action |
These bookkeeping labels help explain the process. The legal requirement is an accurate, traceable account of the funds.
Worked example: a journal is not a reconciliation
Assume an account begins at zero, contains no brokerage money, and has no interest or bank fees. Both receipts clear before month-end. A $1,000 refund is properly authorized, but its check has not yet cleared.
| Entry | Money in | Money out | Journal balance |
|---|---|---|---|
| Buyer A's deposit | $6,000 | $0 | $6,000 |
| Buyer B's deposit | $4,000 | $0 | $10,000 |
| Authorized refund to Buyer A, check 101 | $0 | $1,000 | $9,000 |
The separate ledgers show $5,000 for Buyer A and $4,000 for Buyer B. Total trust liability is $9,000.
The bank statement still shows $10,000 because check 101 is outstanding. Subtract that $1,000 check: the reconciled bank balance is $9,000, matching the journal and the individual balances. Keep the check date and number in the reconciliation. Do not record the refund a second time when it clears.
If the statement also contained an unexplained $25 charge, the account would no longer balance under these assumptions. Investigate and record the discrepancy and corrective action. Never take $25 from another client's balance just to make the totals agree.
Who signs the monthly reconciliation?
A bookkeeper may prepare it. The broker must review, sign and date it. Rule 61J2-14.012 calls for the bank and account details, relevant dates and balances, deposits in transit, outstanding checks, itemized trust liability and other information needed to reconcile the account.
How long must escrow records be kept?
Under F.S. 475.5015, retain brokerage records for at least five years. The period begins when money is received. If no funds are entrusted, it begins when an agreement engaging the broker's services is executed by any party, including a verbal agreement.
If records become involved in litigation, keep them for at least two years after the civil action or any appellate proceeding concludes, whichever is later. The total retention period still cannot be less than five years. A closing date is not the universal starting point.
Escrow deposit deadlines in Florida
| Event | Deadline | Source |
|---|---|---|
| Associate receives a deposit | Deliver to broker or employer by the end of the next business day | 61J2-14.009 |
| Brokerage receives a deposit | Place in escrow by the end of the third business day following receipt | 61J2-14.008 |
| Broker holds funds subject to conflicting demands | Notify FREC within 15 business days of the last party's demand; institute a settlement procedure within 30 business days of that demand | 61J2-10.032 |
| Broker has good-faith doubt about entitlement | Notify FREC within 15 business days after the doubt arises; institute a procedure within 30 business days | 61J2-10.032 |
For these business-day rules, exclude Saturdays, Sundays and legal holidays. The 15-day notice period and 30-day settlement period run from the relevant demand or doubt, not one after the other.
A sales associate receives a deposit on Friday
Assume no legal holidays:
- Monday: the associate's delivery deadline and day one of the broker's placement period.
- Tuesday: day two of the placement period.
- Wednesday: day three, the deadline to place the money in escrow.
Receipt by the associate counts as receipt by the broker. Giving the money to the broker on Monday does not restart the clock. If Monday is a legal holiday, those deadlines move to Tuesday and Thursday respectively.
Where the money goes and who must be a signatory
Rule 61J2-14.010 requires immediate placement of received funds in an insured escrow or trust account with an authorized Florida depository, such as a bank, credit union, savings and loan association, trust company, or title company having trust powers. A securities investment account is not a substitute.
The broker must be a signatory on all escrow accounts maintained by the brokerage. If the entity has more than one broker licensee, one may be designated as the signatory. An office manager's or accountant's signature authority does not remove that requirement. The rule does not say the broker must be the only signatory.
A transaction may instead name an attorney or title company as escrow holder. A broker is not required to maintain an escrow account simply because the broker is licensed.
Title company or attorney verification
Under Rule 61J2-14.008, the licensee who prepares or presents the sales contract must include the named attorney's or title company's contact details. When the verification requirement applies, the licensee's broker must:
- Request written confirmation of receipt within 10 business days after each deposit is due under the contract.
- Within 10 business days after that request, give the seller's broker a copy of the verification or written notice that it was not received. Send it to the seller if there is no seller's broker.
The request requirement has an exception when the seller or seller's agent nominated the attorney or title company in writing. Notice that this clock starts from the deposit's contractual due date, unlike the broker-held deposit clock, which starts from receipt.
What happens when the buyer and seller both demand the deposit?
If the broker holds the disputed funds, identify the last demand, preserve the money, and follow the notice and settlement requirements. The seller's request alone does not authorize payment to the seller. A broker's uncertainty about entitlement can also trigger the rules, even without two competing demands.
F.S. 475.25(1)(d) provides four settlement procedures:
| Procedure | What the broker does |
|---|---|
| Escrow Disbursement Order, or EDO | Requests a FREC determination of who is entitled to the escrowed property |
| Arbitration | Submits the dispute to arbitration with all parties' consent |
| Mediation | Submits it to mediation with all parties' written consent |
| Litigation | Seeks a court determination through interpleader or another court action |
Mediation must succeed within 90 days after the last demand. Otherwise, the broker must promptly use another statutory procedure. That is a separate clock from the 30-business-day deadline to institute a procedure.
If an EDO has been requested and the dispute settles or goes to court before the order is issued, notify FREC within 10 business days. DBPR provides the EDO request form, instructions and supporting-document checklist.
Does silence authorize release?
Not by itself. Rule 61J2-10.032 contains a specific notice procedure for a party who does not respond to an inquiry about demanding or releasing funds in a failed sales transaction. It requires the prescribed notice, contact information and a response deadline of the seventh business day following dispatch. Only after complying with that procedure can nonresponse be treated as authorization. An unanswered casual message is not enough.
When a different procedure applies
The FREC broker-held-funds procedure does not automatically apply to a deposit held by a title company or attorney. Identify the actual escrow holder first.
The statute also permits return without the FREC notice and settlement process when a buyer in good faith fails the contract's financing terms, or exercises a qualifying residential condominium cancellation right under section 718.503. Rule 61J2-10.032 separately addresses covered HUD residential sales deposits. Apply the exception to its stated facts; a buyer changing their mind is not automatically a financing-contingency failure.
Personal funds, commingling and conversion
A broker may keep up to $1,000 of personal or brokerage money in a sales escrow account and up to $5,000 in a property management escrow account under Rule 61J2-14.010. Identify that money in the records. These allowances do not permit using a client's funds for brokerage expenses.
| Situation | Meaning |
|---|---|
| Buyer's deposit goes into the brokerage operating account | Commingling: mixing trust money with other funds |
| Broker spends part of the deposit on office rent | Conversion: unauthorized use of entrusted money |
| Broker plans to replace the spent money tomorrow | Still unauthorized use; an intention to repay does not cure it |
| Broker maintains $3,500 of brokerage money in a sales escrow account | Above the $1,000 sales-account allowance |
The rule allows a limited 30-day correction period for certain escrow errors only when there is no shortage and no significant threat of economic harm. It runs from the date the last reconciliation was performed or should have been performed. It is not a grace period for spending client money.
PRACTICE THE DECISION
Identify the holder, the trigger and the deadline.
Work through original scenarios, then check the explanation before moving on. No copied exam questions.
Interest-bearing accounts and unusual deposits
Rule 61J2-14.014 requires written permission from all parties before placing escrow funds in an interest-bearing account. The agreement must identify who receives the interest and when it will be disbursed. Follow the rule's transfer or account-closing requirements when distributing principal and interest.
A postdated check, promissory note or other noncash item also needs careful handling. Rule 61J2-14.008 defines a deposit broadly. Do not assume every instrument is immediately available cash, conceal its nature from a party, or invent a new deadline simply because the check is postdated. The instrument, agreement and applicable escrow rules need to be read together.
Escrow discipline and related rules
Section 475.25 permits discipline including reprimand, probation, suspension, revocation and fines of up to $5,000 for each count or separate offense. The FREC violations guide explains discipline and the Recovery Fund separately. Recovery Fund payments are not ordinary escrow releases.
Federal transaction-reporting requirements are also a separate subject. They do not replace the state duties to safeguard, record and account for escrow funds. This guide focuses on the Florida escrow material in the sales associate outline.
Three decisions to test your understanding
The bank balance matches, but no client balances exist
A bookkeeper says the account is correct because the journal matches the bank statement. Can the broker stop there?
No. The records must also identify the broker's trust liability. A matching bank total does not establish whose funds remain in the account.
A deposit is disputed at the title company
The buyer and seller each demand $12,000 held by a title company. Does the broker automatically start the FREC notice process for broker-held funds?
No. The holder matters. The title company handles the money under the requirements applicable to that holder. The broker should not describe the funds as being in the broker's trust account.
A refund check remains outstanding
The broker properly issues a $2,000 refund, but the recipient has not cashed it at month-end. Should the broker remove it from the records?
No. Record the authorized disbursement and show the outstanding check in the reconciliation. Timing differences need an explanation, not deletion.
For more original problems, use the existing escrow practice questions. If you miss a question, write down whether the error involved the receipt date, account holder, ownership of funds or authority to release them. Then try a fresh scenario in that category.
Frequently Asked Questions
What record lists deposits and withdrawals in chronological order?
A receipts and disbursements journal records money entering and leaving the account in date order. Individual ledgers identify each client's or transaction's balance. Keep both supported by bank records and payment documentation.
Must the broker be the only escrow account signatory?
No. The broker must be a signatory on all brokerage escrow accounts, but Rule 61J2-14.010 does not require the broker to be the only one. Where the entity has multiple broker licensees, one can be designated.
Is monthly reconciliation enough to satisfy the recordkeeping duty?
No. Record the individual receipts and disbursements and maintain the supporting documents. The monthly reconciliation compares those records with the bank and the broker's itemized trust liability.
Does a sales associate's receipt start the broker's deposit clock?
Yes. Receipt by an associate or another brokerage representative counts as receipt by the broker. The associate's next-business-day delivery deadline does not add another day to the three-business-day placement period.
Are all escrow deadlines business days?
No. The placement, FREC notice and settlement-initiation rules specify business days. The statutory mediation-completion period is 90 days after the last demand. Read each rule's unit rather than applying one calendar to everything.
Methodology
This guide maps escrow concepts to the DBPR sales associate outline and explains the corresponding Florida statutes and FREC rules. The bookkeeping examples are original illustrations with stated assumptions. They are not official exam items or a prescribed accounting system.
Sources
- DBPR sales associate Candidate Information Booklet
- F.A.C. Chapter 61J2-14: escrow accounts
- F.A.C. 61J2-10.032: notice requirements
- F.S. 475.25: discipline and escrow settlement procedures
- F.S. 475.5015: brokerage record retention
This is exam preparation, not advice for releasing disputed funds in a live transaction. Pass Florida is independent of DBPR and FREC and does not guarantee passage. Use the governing rule, contract and appropriate professional guidance for an actual escrow matter.
