Escrow Account
A separate trust account where a broker holds funds belonging to others, kept apart from the brokerage's own money.
An escrow account, also called a trust account, is where a broker holds money that belongs to others, such as buyers' earnest money deposits. The funds must be kept separate from the broker's personal and business money.
A broker may keep a limited amount of personal or business money in the escrow account to cover bank charges: up to 1,000 dollars in a sales escrow account and up to 5,000 dollars in a property management escrow account. Exceeding those limits, or using escrowed money, leads to commingling or conversion violations.
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Brokerage Activities (12% of the exam)
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- Commingling
Mixing escrow funds with a broker's personal or business funds, which is a Florida license law violation.
- Conversion
Using entrusted escrow funds for the broker's own benefit, a serious Florida license law violation that can carry criminal penalties.
- Earnest Money
A good-faith deposit a buyer puts down to show serious intent, held in escrow and applied at closing.
This definition is Florida real estate exam-prep education, not legal, tax, or professional advice. Verify current rules against the official source before relying on them for a real transaction. Back to the full glossary.