Florida Real Estate Sales Associate Examination Content OutlineReal Estate Brokerage Activities and ProceduresEasy
A Florida real estate broker establishes an escrow account for earnest money deposits. The broker receives a $10,000 earnest money deposit from a buyer. Which of the following is a permissible depository institution for this escrow account?
- AA personal checking account of the broker, separate from business funds.
- BA credit union located in a neighboring state, but within 50 miles of the brokerage.
- CA commercial bank chartered under Florida or federal law.
- DA foreign bank located outside the United States.
Show answer & explanationAnswer & explanation
Correct answer: C. A commercial bank chartered under Florida or federal law.
Florida law specifies that escrow accounts must be held in a commercial bank, title company having trust powers, credit union, or savings association located in Florida.
Why the other options are wrong
- A. Commingling escrow funds with personal funds is strictly prohibited and a serious license law violation.
- B. The institution must be located in Florida, not a neighboring state, even if close.
- D. Foreign banks are not permissible depositories for Florida real estate escrow funds.
Escrow Account Depository (FL)
In Florida, real estate escrow funds must be held in a financial institution located within Florida, such as a commercial bank, credit union, or savings association.
- Must be in Florida.
- Commercial bank, credit union, or savings association.
- Title company with trust powers also permissible.
- No commingling with personal or operating funds.
Memory trick: Escrow money, Florida's safety, bank's got the key!