2.3 Escrow Deposit Timelines, Commingling Safe Harbors & Dispute Resolution (MALE)

🎯 Key Florida Real Estate Statutory Takeaways

• Sales associates must deliver earnest money to the broker by the end of the NEXT business day.
• Brokers must deposit trust funds into an authorized Florida escrow account by the end of the THIRD business day.
• Brokers may maintain up to $1,000 personal funds in sales escrow, and up to $5,000 in property management escrow without commingling.
• Upon conflicting demands, brokers must notify FREC in writing within 15 business days, and institute a MALE settlement procedure within 30 business days.

Florida brokers maintain strict fiduciary custody over earnest money deposits. Under F.A.C. 61J2-14.009, when a sales associate receives an escrow deposit, the associate must deliver it to their employing broker no later than the end of the next business day. The broker must deposit the funds into an authorized Florida banking institution no later than the end of the third business day following initial receipt by the brokerage.

Brokers are prohibited from commingling personal funds with trust funds. However, F.A.C. 61J2-14.010 creates a necessary safe harbor: a broker may maintain up to $1,000 of personal or brokerage funds in a sales escrow account, and up to $5,000 in a property management escrow account, to cover monthly banking charges and maintain minimum balances.

If buyer and seller make conflicting demands on escrow funds, the broker must notify FREC in writing within 15 business days of the last demand. Within 30 business days of the dispute, the broker must formally institute one of four statutory settlement procedures (MALE): (1) Mediation (with 90 days to achieve non-binding resolution); (2) Arbitration (submitting to a binding arbitrator); (3) Litigation; or (4) Requesting an Escrow Disbursement Order (EDO) from FREC.

If resolving the dispute through litigation: if the broker asserts zero claim to the deposit, they file a Bill of Interpleader with the circuit court and are discharged with court costs. If the broker claims a portion of the deposit (such as earned commission), the broker must file a suit for Declaratory Judgment.

⚠️ Common Pearson VUE / FREC Exam Traps

• Counting calendar days instead of business days for escrow deposits — Saturdays, Sundays, and legal holidays are excluded.
• Believing brokers can place unlimited operating funds in escrow — exceeding $1,000 in sales escrow is illegal commingling.
• Filing for an Interpleader when the broker claims a commission — if the broker claims funds, they must file a Declaratory Judgment.