Escrow deposits under Florida real estate law
Last reviewed: November 2026
Florida real estate escrow rules come mainly from one paragraph of the license law: s. 475.25(1)(k), F.S. It tells a sales associate to hand every deposit to the broker, tells the broker where the money may be held, and caps how much of the broker's own money can sit in the escrow account. A second paragraph, s. 475.25(1)(d)1., tells the broker what to do when the buyer and seller both claim the deposit.
Escrow is part of exam area V, brokerage activities and procedures, which carries 12% of the exam. The escrow rules come down to exact amounts and exact steps.
Florida real estate escrow rules in one table
| Who | What the law requires | Statute |
|---|---|---|
| Sales associate | Immediately place any money, deposit, check or draft with the registered employer (the broker) | s. 475.25(1)(k) |
| Sales associate | Collect money only in the employer's name and with the employer's express consent | s. 475.42(1)(d) |
| Broker | Immediately place funds in escrow with a Florida title company, bank, credit union or savings and loan, or in the broker's own trust or escrow account at a Florida bank, credit union or savings and loan | s. 475.25(1)(k) |
| Broker | Keep the funds there until disbursement is properly authorized | s. 475.25(1)(k) |
| Broker | Review the brokerage's trust accounting procedures | s. 475.25(1)(v) |
| Broker | Keep books and records for at least 5 years | s. 475.5015 |
The sales associate's role
A sales associate never holds escrow. When a buyer hands you an earnest money check, your only job is to deliver it to your broker right away. You cannot deposit it in your own account, and you cannot hold it "until the seller signs". The statute uses the word "immediately" for both the sales associate and the broker. The statute leaves record keeping and the manner of making deposits to commission rules (s. 475.25(1)(k)), so learn any exact deposit deadlines from the commission's current rules, not from this page.
The same logic explains why a sales associate can sue for a commission only against the broker who was their registered employer when the work was done (s. 475.42(1)(d)). Money in a brokerage transaction flows through the broker.
How much of the broker's own money is allowed
Mixing personal money with client money is the classic escrow violation. Florida allows a broker to keep a limited amount of personal or brokerage money in escrow:
- up to $1,000 of personal or brokerage funds in a sales escrow account;
- up to $5,000 in a property management escrow account (s. 475.25(1)(k)).
Example: a broker keeps $1,400 of her own money in the sales escrow account. She is $400 over the limit. If there is no shortage and no real risk of harm to the public, the law gives a broker a reasonable time to correct escrow errors (s. 475.25(1)(k)).
When the buyer and seller both want the deposit
If the broker in good faith doubts who is entitled to escrowed property, or receives conflicting demands, the broker must promptly notify the commission and promptly use one of four escape procedures (s. 475.25(1)(d)1.):
- Escrow disbursement order (EDO): ask the commission to decide who gets the money.
- Arbitration: only with the consent of all parties.
- Litigation: interpleader or another court action.
- Mediation: only with the written consent of all parties, and it must be completed within 90 days after the last demand. If it fails, the broker must promptly use one of the other procedures.
A broker who promptly uses one of these and follows the resulting order or judgment cannot face an administrative complaint for failing to account for or deliver the deposit.
When the broker can return the deposit without an escape procedure
The statute names two cases where the licensee may return the deposit to the buyer without notifying the commission:
- the buyer of a residential condominium unit delivers a written notice of cancellation authorized by s. 718.503; or
- the buyer, in good faith, fails to satisfy the terms of the financing clause of the contract.
The commission may set other circumstances by rule.
What counts as a failure to account
Section 475.25(1)(d)1. covers failing to account for or deliver money, deposits, checks, documents "or other thing of value" when it is due or on demand. A licensee who buys property under a contract that requires a deposit in escrow must actually make that deposit (s. 475.25(1)(d)2.). And every brokerage relationship, including no brokerage relationship, carries the duty of accounting for all funds (s. 475.278).
The penalty range is the same as for other violations of s. 475.25(1): up to a $5,000 fine per count, suspension up to 10 years or revocation. See Florida real estate license law for the full list.
Exam traps
- A sales associate gives the deposit to the broker. Not to the title company, not to the seller, not to their own account.
- $1,000 is the sales account limit, $5,000 the property management limit. Questions swap them.
- Arbitration needs consent; mediation needs written consent and has a 90-day clock. An EDO and litigation do not need the parties' consent.
- A failed financing contingency in good faith: the deposit can go back to the buyer without an escape procedure.
- Records: 5 years from receipt of funds (s. 475.5015).
Practice question
A broker receives conflicting written demands for a $15,000 deposit. The buyer and seller refuse to sign anything together. Which escape procedure can the broker use without the parties' consent?
A) Mediation. B) Arbitration. C) An escrow disbursement order. D) Returning the deposit to the buyer.
Answer: C. Mediation needs written consent of all parties and arbitration needs their consent. Returning the deposit without a procedure is allowed only in the two cases the statute names or in circumstances the commission sets by rule, and nothing here fits them.
Test yourself
Escrow questions appear in the free Florida practice test, with the statute behind each answer. Related topics: brokerage relationships and closing statements and prorations. For more area V questions and timed exams, see the paid question bank.
Real Estate Drill is an independent study tool, not legal advice. We are not affiliated with FREC, DBPR or Pearson VUE.