Florida Real Estate Broker ExaminationReal Estate Brokerage ManagementHard
A Florida broker has received conflicting demands for an earnest money deposit held in escrow. Both the buyer and seller claim entitlement to the funds after a failed transaction. What is the broker's first and most appropriate action according to Florida Statute 475?
- AImmediately disburse the funds to the party who made the initial deposit.
- BHold the funds until the parties reach a written agreement on disbursement.
- CObtain a legal opinion from an attorney and disburse funds based on that advice.
- DNotify the Florida Real Estate Commission (FREC) within 15 business days of the conflicting demands.
Show answer & explanationAnswer & explanation
Correct answer: D. Notify the Florida Real Estate Commission (FREC) within 15 business days of the conflicting demands.
Florida Statute 475.25(1)(d) and Rule 61J2-14.009 F.A.C. require a broker to notify the FREC in writing within 15 business days of receiving conflicting demands for an escrow deposit. This initiates the settlement procedures.
Why the other options are wrong
- A. Disbursing funds unilaterally in a conflicted situation is a violation of escrow rules.
- B. While ideal, waiting indefinitely is not an acceptable legal action; the broker must initiate a formal resolution process.
- C. Seeking a legal opinion is one of the four settlement procedures (an EDO, mediation, arbitration, or interpleader), but the first step is to notify FREC.
Conflicting Demands (Escrow)
When a Florida broker receives conflicting claims for an escrow deposit, they must follow specific procedures outlined by FREC to resolve the dispute, starting with notification to the Commission.
- Broker cannot unilaterally disburse funds.
- Must notify FREC within 15 business days.
- Initiates one of four settlement procedures (EDO, mediation, arbitration, interpleader).
Memory trick: Conflicting escrow: Don't play judge, call FREC within 15 days, then choose your path.