Escrow is the single most heavily tested area of Florida license law, and it is also where real licensees lose their licenses. FREC treats other people's money as the bright line: nearly every deadline below exists so that a deposit can be traced, at any moment, to the person who actually owns it. Here is every timeline the sales associate exam expects you to know, followed by the rules that produce them.
| Trigger | Deadline | Authority |
|---|---|---|
| Sales associate receives funds | Immediately deliver to the employing broker | F.A.C. 61J2-14.009 |
| Broker deposits escrow funds | End of the 3rd business day after receipt | F.A.C. 61J2-14.008(3) |
| Conflicting demands arise | Notify FREC in writing within 15 business days | F.S. 475.25(1)(d); 61J2-10.032 |
| Escrow error found, no shortage | Correct within a reasonable time — 30 days from the last reconciliation | F.A.C. 61J2-14.010(2) |
| Account reconciliation | At least monthly, in writing | F.A.C. 61J2-14.012 |
| Escrow records retention | At least 5 years | F.S. 475.5015 |
Exam questions routinely blur these together, and the answer changes depending on who is holding the check.
The sales associate's clock. An associate who receives funds in connection with a transaction must deliver them to the employing broker immediately. The associate does not deposit the funds, does not hold them “until Monday,” and does not open an account. The check should be made payable to the brokerage or the title company — never to the associate personally. An associate who deposits earnest money into their own account has committed a serious violation before any deadline has even run.
The broker's clock. The broker must place the funds into escrow no later than the end of the third business day following receipt. FREC defines the word “immediately” to mean exactly this. Business days exclude weekends and legal holidays, which is the detail most questions are built around.
Florida limits the permitted depositories. Escrow funds may be placed in a Florida bank, a title company, or an attorney's trust account. The account must be maintained in the name of the brokerage, not the individual broker and not a sales associate.
Commingling is mixing trust funds belonging to others with the broker's personal or business operating funds. It violates F.S. 475.25(1)(k) and is among the most commonly disciplined offenses in Florida. Paying office rent out of the escrow account is the textbook example — escrow money can never fund business expenses, even temporarily, even if repaid.
The narrow exception: a broker may keep up to $1,000 of personal funds in a sales escrow account for the sole purpose of covering bank service charges. That is a floor to prevent overdrafts, not a license to blend accounts.
A deal collapses. The buyer demands the earnest money back, the seller demands it as liquidated damages, and neither will sign a release. The broker now has conflicting demands, and a specific procedure kicks in.
Step one: notify FREC in writing within 15 business days of receiving the conflicting demands or otherwise becoming aware of the dispute.
Step two: institute one of four settlement procedures. The exam asks you to recognize all four:
Two details that carry points: an EDO is issued by FREC, not by the DBPR, a court, or the broker's attorney. And conflicting demands are a legitimate reason for a broker to refuse to release funds — a broker who holds the deposit while the dispute procedure runs is complying with the law, not violating it.
A single escrow failure can implicate multiple subsections of F.S. 475.25 at once. Failing to account for or deliver funds falls under 475.25(1)(d); fraud, dishonest dealing, culpable negligence, and breach of trust fall under the much broader 475.25(1)(b). Which charges FREC actually files depends on the facts — intent, recklessness, and whether false statements were made to the parties.
If a consumer wins a judgment against a licensee for misappropriated escrow funds and cannot collect, the Florida Real Estate Recovery Fund may compensate them. The fund pays the injured party — it does not protect the licensee, whose license is typically suspended until the fund is reimbursed.
Escrow questions are written to look nearly identical to each other, which is exactly why reading about them is not enough. PassFlorida's free practice test includes escrow scenarios with the statute cited on every explanation — no sign-up needed.
Start the free test →Statutory references: F.S. 475.25(1)(b), (1)(d), (1)(k); F.S. 475.5015; F.S. 475.482–475.484; F.A.C. 61J2-14.008, 61J2-14.009, 61J2-14.010, 61J2-14.012, 61J2-14.014; F.A.C. 61J2-10.032. Rules change — verify current text at the Florida Legislature and FREC before relying on any of this professionally. Exam-preparation material, not legal advice.