Florida Realtors Legal Hotline gets many questions about the rules governing escrow deposits – and many come from listing agents upset because they haven’t received proof, or at least notification, that the buyers made deposits by the dates stated in the contract. Here is an overview of the most common issues.
Proof of deposit
The call usually starts with a statement like this, “I have been waiting for the buyer’s agent to send me a copy of the deposit check! It still hasn’t been sent and I asked for it days ago!”
Let’s make this point clear: No law requires an agent to send a copy of an escrow check (or wire transfer) as proof that an escrow deposit was made. Furthermore, a copy of a check proves only that a check was written – not that it was given to the escrow agent in accordance with the contract.
You can certainly ask for a copy of the escrow deposit check (or wire transfer), but if you don’t get one, it doesn’t mean something was done illegally or not in accordance with the contract. Short of your contract requiring a copy of a check to be sent by a certain date, there just simply is no requirement for this.
Verification of deposit
The requirement for verification of escrow depends on who chooses the escrow agent – the buyer or the seller.
If the buyer chooses the escrow agent …
Section 61J2-14.008(2)(b) of the Florida Administrative Code says the following rules apply:
- If the buyer is choosing a title company or attorney as the escrow agent, the licensee who prepares the contract must indicate the name, address and telephone number of such title company or attorney on the contract. Please note, putting “TBD” (to be determined) doesn’t comply with this rule.
- Within 10 business days after each deposit’s due date, the broker representing the buyer must make a written request to the title company or attorney, asking the escrow agent to verify receipt of the buyer’s deposit.
- Then, within 10 business days of the date that request was sent, the broker for the buyer must provide the seller’s broker with a copy of the confirmation of receipt from the escrow agent.
- If there was no response from the title company or attorney, then that buyer’s broker must inform the listing broker that they did not receive verification from the escrow agent.
Note that this rule only applies if 1) the buyer chooses the escrow agent, and 2) the escrow agent is an attorney or title company.
If the buyer chooses a title company or attorney as escrow agent, the buyer’s broker must comply with Florida Administrative Code and provide a response to the listing broker.
If a broker – not a title company or attorney – holds the escrow, then the two brokers involved in the transaction can confirm receipt upon request, but there is no verification procedure required by law.
If the seller chooses the escrow agent …
Should the seller pick a title company or attorney as escrow agent, the above rules don’t apply – and there is no verification requirement. The listing broker can contact the escrow agent directly to verify receipt of the deposit.
Understanding the role of the agents with respect to escrow verification is key to avoiding potential unnecessary conflict.
Meredith Caruso is Associate General Counsel for Florida Realtors
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