Money, Escrow, and Records

Money is where a small mistake becomes a license problem. A check left in a car, a commission promised to a friend, or one emailed wiring change can cost a client six or seven figures and cost you your license.

The core rule: you never hold or move client money. Your broker of record does. Your job is clean paperwork, fast hand-offs and early escalation.

Builds on. Lesson 1, Lesson 3, Course 25 Lesson 5 (deposits), Course 25 Lesson 7 (wire script), and Course 26 Lesson 4 (deal files).

Education, not legal advice. This lesson cites Florida Statutes (F.S.) and Florida Administrative Code (F.A.C.) sections as we read them. Confirm current wording at flrules.org and leg.state.fl.us, and confirm legal and tax points with your broker of record, a Florida attorney and a CPA.

Who may touch the money

Deposits are held by the broker, a title company, or an attorney. A sales associate is never on that list. Under F.S. 475.42(1)(d), an associate may not collect money in a brokerage transaction except in the name of the employer and with the employer's express consent. A buyer's deposit is not yours, not the firm's and not the seller's yet. If the broker holds it, it goes into the brokerage escrow account, and a broker must be a signatory. If a title company or attorney holds it, you note the holder's contact on the contract and confirm receipt in writing. You decline and redirect.

Why the rules exist: escrowed money belongs to other people while a deal can still fail. F.S. 475.25(1)(k) makes it a discipline ground for a broker to fail to place entrusted funds in escrow immediately, and for an associate to fail to give funds to the registered employer. F.S. 475.25(1)(d) covers failing to account for or deliver money when due. Discipline can include a fine, suspension or revocation (Lesson 2 has the penalty menu), so the Florida Real Estate Commission (FREC) treats money handling seriously.

Deposit timing and the escrow account

Escrow means money held for others until it is properly authorized for release. Two clocks run at once: yours and the broker's.

Weekends and legal holidays are not business days. Illustration: you receive a $25,000 flex purchase check on Friday. It reaches the broker by the end of Monday, and the broker's outside deadline is the end of Wednesday. Many brokerages set tighter deadlines, so follow yours.

(a) Situation: A buyer hands you a check at a property tour. "Thank you. I can take this only in the firm's name. I will deliver it to our broker of record today, and you will get a written receipt. Or we can wire it to the title company named in the contract."

Commingling means mixing your own or the firm's money with client money. The rules allow only a small cushion for bank fees: up to $1,000 of brokerage funds in a sales escrow account, or $5,000 in a property management account (F.S. 475.25(1)(k); F.A.C. 61J2-14.010(2)). Conversion means using someone else's escrowed money. Florida treats it as breach of trust and failure to account; paying a firm expense from a client's deposit is the classic example. The broker must also reconcile each escrow account monthly (F.A.C. 61J2-14.012), so your receipts must be in the file.

When a deposit is disputed

A dispute starts when the broker holding the funds gets conflicting demands, or doubts in good faith who is entitled. Industrial example: a flex buyer terminates during inspection and demands the deposit back, and the seller demands forfeiture. NNN example: a buyer cannot get the tenant estoppel (the tenant's written confirmation of its lease terms), terminates, and the seller disputes it. In both, the deposit stays where it is. If a title company holds it, your broker still needs to hear about the dispute the same day.

Stop. Do not release, split or promise the money. Call the broker of record. The broker cannot decide who wins, and neither can you.

(b) Situation: Your client demands the deposit back and the other side demands it too. "I will document your demand today. I cannot release or compromise on the deposit. Our broker of record must follow Florida's escrow dispute process, and I will keep you informed."

F.S. 475.25(1)(d)1. requires the broker to notify FREC promptly and use one of four settlement procedures. F.A.C. 61J2-10.032 sets the clocks.

A broker who promptly uses one and follows the resulting order or judgment is protected from an administrative complaint for failing to account for the funds. Illustrative clocks: if the last demand arrives Monday, March 1, 2027, 15 business days is Monday, March 22, and 30 business days is Monday, April 12 (3 weeks x 5 and 6 weeks x 5, no holidays). Log the last-demand date the day it happens. DBPR cannot award restitution or decide commission fights; those are civil matters.

Commissions

Commissions belong to the brokerage, not to you.

Never pay or promise a referral fee to an unlicensed person, and route any referral or split through your broker. The full rules and examples are in Lesson 3.

A disbursement authorization is the broker's written instruction telling the closing agent who is paid and how much. Payment instructions change only through the broker, in writing, verified.

Records

F.S. 475.5015 requires the broker to keep books, accounts and records that let DBPR check compliance, and to preserve at least one legible copy. The statute does not name paper or electronic. Escrow records are open to inspection during business hours (F.A.C. 61J2-14.012).

Illustration: a deposit received Wednesday, October 21, 2026 means keep the file through at least October 21, 2031. If a lawsuit over that file ends June 1, 2030, then June 1, 2030 plus 2 years is June 1, 2032, which is later, so the file stays through June 1, 2032.

Your job is to deliver complete files: signed agreements, the letter of intent (LOI), contract and addenda, deposit receipts, disbursement authorizations, commission agreements, emails, texts, call notes and every disclosure you gave. The commercial closing checklist covers the closing packet.

Retainers, application fees and security deposits

Not every dollar is earnest money. Treat any money handed to you the same way: do not take it, route it to the broker, and ask.

• Retainer on a buyer or tenant representation agreement: only the brokerage may hold it, if firm policy allows. Ask whether it is refundable.
• Lease application or screening fee: held per firm policy. Ask whether it counts as transaction funds.
• Lease security deposit: usually the landlord holds it under the lease. If the brokerage holds it, escrow rules apply.

As we read F.A.C. 61J2-14.008(1), "deposit" covers money or its equivalent given to a licensee in a transaction, with no commercial exemption. Never quote a fee your broker has not approved.

Wire fraud and business email compromise

Business email compromise (BEC) means a criminal breaks into or imitates an email account, watches a real deal, and sends fake payment instructions at the right moment. The FBI's Internet Crime Complaint Center (IC3) collects these reports. In commercial deals the targets are deposit wires, loan payoffs, seller proceeds and 1031 exchange funds sent to a qualified intermediary (QI).

Prevention is a process. Tell every client in writing at contract that only the title company sends wire instructions and your firm never changes them by email. Verify by phone using a number you already know, taken from the contract, the title company's website or a prior verified call, never from the email that changed the instructions. Use multi-factor authentication, and confirm receipt by phone after every wire.

(c) Situation: Wire warning for your email signature. "Wire fraud warning: MaxLife Commercial, a division of MaxLife Realty LLC, and its agents never change wire instructions by email. Always confirm by phone using a number you already know."

(d) Situation: You call the title company to verify. "This is [Name] with MaxLife Commercial, a division of MaxLife Realty LLC. I am calling the number in our contract for [property]. Did you send updated wire instructions today? Please confirm the account and amount before anyone sends funds."

If someone is fooled, minutes matter. The FBI tells victims to ask their bank for a recall right away and to file at ic3.gov regardless of amount, and IC3 may help freeze funds when notified quickly. The National Association of Realtors advises filing within 24 hours, and no later than 72 hours, for the best chance of recovery. Weekends count: a Friday 3:00 p.m. wire reaches 72 hours Monday at 3:00 p.m.

Documentation habits

Confirm every phone call by same-day email ("Confirming our call today: the deposit goes to [holder] by [date]"). Keep deal texts, the deposit receipt, the wire confirmation and the holder's written verification in the file, and never delete a message once a dispute begins. If FREC or a lawyer asks for your file, your broker of record responds, and a complete file keeps that short. See Lesson 5 for communication rules.

A worked example (illustrative numbers, not market data)

Assumptions (invented, not MaxLife results): Dana is a sales associate representing the buyer of a $3,000,000 industrial building in Orange County. The contract is effective Monday, October 19, 2026 and requires a $75,000 deposit within 3 business days, held by a title company named in the contract. The buyer pays all cash. Closing is Friday, December 4, 2026.

The arithmetic: the deposit is 75,000 / 3,000,000 = 0.025, or 2.50% of price. The balance is 3,000,000 - 75,000 = $2,925,000. Three business days from Monday, October 19 is Thursday, October 22. The verification request is due 10 business days later, or 2 weeks x 5 = Thursday, November 5, assuming no holidays. Had the buyer handed Dana a check instead, she would owe it to her broker by the end of the next business day.

The fraud attempt. On Wednesday, December 2 at 4:10 p.m., the buyer forwards an email that appears to come from the title company. It says the $2,925,000 must go to a new account. The sender's domain has one letter changed. Dana does not reply to the email. She calls the number from the contract, and the title company says it sent nothing. She tells the buyer not to wire, informs her broker of record, and saves the email with headers.

If the buyer had wired the $2,925,000: the buyer calls the bank at once for a recall and files at ic3.gov that day. Recovery is never guaranteed.

Key takeaways

• You never hold client money. Hand every deposit to your broker of record or the named holder the same day.
• Follow the clocks: to your broker by the end of the next business day, into escrow by the end of the third, with written receipt when a title company holds it.
• No commingling and no conversion. Client money is never firm money.
• In a deposit dispute, stop and call your broker. FREC notice is due within 15 business days of the last demand, and a settlement procedure within 30.
• Commissions go through the brokerage. Never promise a referral fee to an unlicensed person.
• Give your broker complete files: retention is at least 5 years, longer after litigation.
• Never trust emailed wire changes. Verify by phone at a known number, and if fooled, call the bank and file at ic3.gov within minutes.

Next: Lesson 5 covers advertising, prospecting, and communication rules.