Escrow deposits and deposit deadlines
A deposit is money or its equivalent that a licensee receives as earnest money, as a payment or part payment, or to hold in escrow, in trust or on condition. Cash, checks and securities meant to be turned into money all count (Rule 61J2-14.008(1)).
Where the money goes
A broker who receives a deposit must place it in an insured escrow or trust account at a bank, savings and loan association, trust company, credit union or title company with trust powers (Rule 61J2-14.010(1)). The broker must be a signatory on every escrow account. If the firm has more than one broker licensee, one of them may be designated as the signatory.
Sales associates never hold escrow accounts of their own. A sales associate passes the deposit to the broker who employs them.
The deadlines
| Who | Deadline | Rule |
|---|---|---|
| Sales associate | Deliver to the broker by the end of the next business day after receiving it | 61J2-14.009 |
| Broker | Place in escrow "immediately," meaning by the end of the third business day after receipt | 61J2-14.008(3) |
Saturdays, Sundays and legal holidays are not business days for either deadline.
When a sales associate or anyone else at the brokerage receives a deposit, the broker is treated as having received it at that same moment (Rule 61J2-14.009).
That last point is the one the exam likes to test. The broker's three business days start when the associate gets the check, not when the associate walks it into the broker's office. If the associate uses a full day to deliver, the broker has two business days left.
Counting business days
- Find the day the deposit was received. That day is day 0.
- Count forward, skipping Saturdays, Sundays and legal holidays.
- The deadline is the end of the last counted day.
A check received on Friday, with the following Monday a legal holiday, must reach the broker by the end of Tuesday. It must be in escrow by the end of Thursday (Tuesday, Wednesday, Thursday).
Deposits held by a title company or attorney
Sometimes the contract calls for a title company or attorney to hold the deposit instead. The licensee who prepared or presented the contract must write the holder's name, address and phone number on it. Within 10 business days after the deposit is due, that licensee's broker must ask the holder in writing to confirm receipt. Within 10 business days after asking, the broker must send the seller's broker a copy of the confirmation, or written notice that none came. The broker sends it to the seller directly if the seller has no broker. These steps are not needed when the seller or the seller's agent named the title company or attorney in writing (Rule 61J2-14.008(2)(b)).