Commingling, reconciliation, and brokerage records
Escrow money belongs to the people in the transaction, not to the brokerage. The rules keep it separate, track it every month, and leave a paper trail.
Commingling
No licensee may mix personal funds with money held in escrow (Rule 61J2-14.008(2)(a)). There is one narrow exception. A broker may keep a limited amount of personal or brokerage money in an escrow account (Fla. Stat. 475.25(1)(k); Rule 61J2-14.010(2)):
| Account type | Personal or brokerage funds allowed |
|---|---|
| Sales escrow account | Up to $1,000 |
| Property management escrow account | Up to $5,000 |
Interest-bearing escrow accounts
A broker may put escrow funds in an interest-bearing account, but only with the written permission of all parties to the transaction. The permission must say who gets the interest and when it is paid out. The account must be insured and held at a depository doing business in Florida (Rule 61J2-14.014(1)).
The monthly statement-reconciliation
Once a month, the broker must have a written statement made that compares the broker's total trust liability with the reconciled bank balances of all trust accounts (Rule 61J2-14.012(2)). Trust liability is the total of all deposits received, pending and held by the broker at that point in time.
The statement must show, at a minimum:
- the date the reconciliation was done and the date used to reconcile balances
- the bank, account names, account numbers, balances and dates
- deposits in transit and outstanding checks (by date and check number)
- an itemized list of the broker's trust liability
The broker must review, sign and date it. When the liability and the bank balances do not match, the statement must explain the difference and the corrective action taken. A returned-check fee or a negative balance must also be explained (Rule 61J2-14.012(3)).
Correcting errors
A broker gets a reasonable time to fix escrow errors if no funds are short and the errors pose no significant threat of economic harm to the public. "Reasonable time" means 30 days from the date the last reconciliation was performed or should have been performed (Rule 61J2-14.010(2)).
Keeping records
Brokers must keep at least one legible copy of brokerage records for at least 5 years (Fla. Stat. 475.5015). The clock starts when money was entrusted to the broker, or, if none was, when a party signed the listing, offer, lease or other agreement. Records involved in a lawsuit must be kept at least 2 years after the case and any appeal end, and at least 5 years in total.
The broker's rights in a deposit
A broker has no claim on a deposit just because it is in the broker's account. Until closing, the broker may not hand the deposit to the other party unless the depositor directs or agrees. After closing, the broker may take the agreed commission. If the commission amount is disputed, the broker keeps only the disputed amount in trust until the dispute is resolved (Rule 61J2-14.011).