Florida Real Estate Sales Associate Examination Content OutlineReal Estate Brokerage Activities and ProceduresHard
A Florida real estate broker is involved in an escrow dispute concerning earnest money. After exhausting all other avenues, the broker decides to seek an Escrow Disbursement Order (EDO) from the Florida Real Estate Commission (FREC). Which of the following statements is TRUE regarding the EDO process?
- AThe broker must first obtain written consent from all parties to the dispute before filing for an EDO.
- BThe broker can only seek an EDO if the amount in dispute exceeds $5,000.
- CAn EDO is a binding decision issued by FREC that directs the broker on how to disburse the escrow funds.
- DFiling for an EDO automatically means the broker will be reimbursed for legal fees incurred during the dispute.
Show answer & explanationAnswer & explanation
Correct answer: C. An EDO is a binding decision issued by FREC that directs the broker on how to disburse the escrow funds.
An Escrow Disbursement Order (EDO) is a formal, binding decision issued by FREC that instructs a broker on how to disburse disputed escrow funds. It is one of the four statutory methods for resolving an escrow dispute in Florida when other attempts at resolution have failed.
Why the other options are wrong
- A. If all parties agree, they would typically sign a release rather than needing an EDO. EDOs are for when agreement cannot be reached.
- B. There is no minimum dollar amount requirement for seeking an EDO.
- D. Filing for an EDO does not guarantee reimbursement of legal fees; such reimbursement is not part of the EDO process itself.
Escrow Disbursement Order (EDO)
A legally binding order issued by the Florida Real Estate Commission (FREC) directing a broker on how to disburse disputed escrow funds.
- One of four statutory methods for escrow disputes.
- Broker must have a 'good faith doubt' about who is entitled to funds.
- Binds the broker to follow FREC's instructions.
Memory trick: Escrow dispute? EDO is FREC's final word for the broker.