Escrow Accounts

An Escrow Account is a special bank account used exclusively for holding funds on behalf of others. It is a "safe zone”. Brokers may open escrow accounts in a Florida bank, a savings association, or a credit union. The Signatory: The Broker must be a signatory on this account. Even if they hire an accountant to manage the books, the Broker is ultimately responsible and must be able to sign checks. If the broker chooses not to open an escrow account, the funds may be held by a title company or in a Florida-licensed attorney’s trust account. When a deposit is placed with a title company, Name of the title company, Address of the title company and Telephone number of the title company must be included on the Purchase and Sale agreement. Sales associates must deliver binder deposits to their broker-employer no later than the end of the next business day. Brokers must deposit the funds into their escrow account no later than the end of the third business day after the brokerage receives the funds.Can these accounts earn interest? Yes, but it's tricky. You need written permission from all parties (buyer and seller) specifying exactly who gets the interest. The broker may receive the interest. Without a written permission, the account should be non-interest bearing.Reconciliation: The Broker cannot just ignore this account. Once a month, the Broker must review, sign, and date a "Reconciliation Statement" (like balancing the checkbook used to be) to prove every penny is accounted for.