The Florida Realtors Legal Hotline gets many questions about the rules governing escrow deposits, often from listing agents who are upset they haven’t received proof, or at least notification, that the buyer made the deposit by the date stated in the contract. Here’s what you need to know:
Proof of deposit. There is no law requiring an agent to send a copy of an escrow check (or wire transfer) as proof an escrow deposit has been 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.
Verification of deposit. The requirement for verification of the escrow depends on who chooses the escrow agent — the buyer or the seller.
If the buyer chooses a title company or attorney as the escrow agent, Section 61J2 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 the title company or attorney on the contract.
·Within 10 business days after each deposit is due, 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 the buyer’s broker must inform the listing broker they did not receive verification from the escrow agent.
Again, 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 seller picks a title company or attorney as the escrow agent, these rules do not apply and there is no verification requirement. However, the listing broker can confirm receipt by contacting the escrow agent directly after each deposit is due according to the dates in the contract.
If a broker, not a title company or attorney, is holding the escrow, then the two brokers involved in the transaction can confirm receipt upon request, but there is no procedure for verification required by law.
Understanding the role of the agents with respect to escrow verification is key to avoiding potential unnecessary conflict.
Meredith Caruso is Manager of Member Legal Communications for Florida Realtors
© 2016 Florida Realtors®
Reprinted with permission Florida Realtors. All rights reserved.