61J2-14.010 & 61J2-14.011 Broker Escrow Duties and Rights +10Florida · Real Estate · English

Brokers must immediately place received funds into an insured escrow account and are limited in placing personal funds in escrow accounts.

• ✓A broker must immediately place received deposits into an insured escrow or trust account in a Florida depository, and be a signatory on all escrow accounts
• ✓A broker may place/maintain up to $1,000 of personal/brokerage funds per sales escrow account
• ✓A broker may place/maintain up to $5,000 of personal/brokerage funds per property management escrow account
• ✓A broker has a reasonable time (30 days from last reconciliation) to correct escrow errors if no shortage and no threat to the public

A broker has no right or lien on a deposit except by agreement, and must handle disputed commissions and demands for return per statute.

• ✓A broker has no right or lien on a deposit except upon written agreement or order of the depositor
• ✓In a commission dispute, the broker may retain only the amount of the claim in trust until settled by agreement, arbitration, mediation, or court
• ✓A depositor may demand return of a deposit until another party has acquired some interest or equity
• ✓The broker must comply with joint directions of the parties except where they act in bad faith to deprive the broker of a commission

Brokers must reconcile trust accounts monthly, comparing total trust liability with reconciled bank balances and documenting discrepancies.

• ✓Once monthly a broker must prepare a written statement comparing total trust liability with reconciled bank balances of all trust accounts
• ✓The reconciliation must include specified information and the broker must review, sign, and date it
• ✓If trust liability and bank balances do not agree, the reconciliation must describe the difference and any corrective action
• ✓Trust liability is the sum total of all deposits received, pending, and held by the broker at any point in time

Brokers may place escrow funds in interest-bearing accounts only with written permission of all parties designating who receives the interest.

• ✓Placement in an interest-bearing account, designation of who receives the interest, and disbursement timing require written permission of all parties
• ✓The escrow account must be in an insured account in a depository located and doing business in Florida
• ✓To disburse, the broker must first transfer principal and interest to a non-interest-bearing escrow account before disbursement (or use an individual interest-bearing account closed at disbursement)

An order revoking or suspending a broker's license automatically causes the licenses of all sales associates and broker associates registered with the broker (and firm members/officers/directors) to become involuntarily inactive while the broker's license is inoperative or until new employment is secured.

• ✓Broker license revocation makes registered associates involuntarily inactive
• ✓Associates remain inactive until new employment/connection is secured

No contract for a commission or compensation for any real estate act/service is valid unless the broker or sales associate complied with chapter 475 regarding license issuance and renewal at the time the act or service was performed.

• ✓Commission contracts are invalid unless licensee was properly licensed
• ✓Licensee must have complied at the time the act/service was performed

Instructor permit applicants must meet statutory qualifications including defined extensive real estate experience.

• ✓'Extensive real estate experience' means a minimum of three years of full-time experience as a broker
• ✓Experience must include participating in closing at least five real estate transactions within the 12 months preceding the application
• ✓A school may not guarantee that pupils will pass any licensure examination

Schools may use guest lecturers within limits and must not recruit for brokerages during instructional time.

• ✓Guest lecturers may provide no more than 20% of the total course, with a licensed instructor available on premises
• ✓No school, permit holder, or instructor may recruit for brokerage employment during instructional time
• ✓Each classroom and administrative area must post the recruiting notice, read at the beginning of each course

A person may not operate as a broker or sales associate without holding a valid, current, active license. Violation is a third-degree felony punishable under s. 775.082 or s. 775.083. This is one of the few felony-level violations in the chapter.

• ✓Operating without a valid active license is a third-degree felony
• ✓A sales associate may not operate for any unregistered employer

A sales associate may not collect any money in connection with a brokerage transaction except in the employer's name with the employer's express consent. A sales associate may not maintain an action for compensation against anyone except the registered employer at the time of the service.

• ✓Sales associate collects money only in the employer's name with consent
• ✓Sales associate may sue for compensation only against the registered employer

A person may not make false affidavits, obstruct enforcement, record false documents, operate under an unregistered trade name, conceal violations, or disseminate false/misleading real estate information. Violations of subsection (1) are second-degree misdemeanors punishable under s. 775.082 or s. 775.083.

• ✓General violations of s. 475.42(1) are second-degree misdemeanors
• ✓Prohibits false affidavits, concealment, and misleading dissemination
• ✓May not record false documents to coerce commission payment

The Florida Real Estate Commission has a defined membership and uses a probable cause panel to determine violations.

• ✓The Commission consists of 7 members who elect a chairperson and vice chairperson
• ✓A probable cause panel must consist of at least one present member of the Commission; one panel member may be a former member
• ✓Three consecutive unexcused absences, or absences of 50% or more within any 12-month period, cause membership to become void

Brokers handling time-share resales must use agreements with specific mandatory disclosures, or it is a violation of Chapter 475.

• ✓Agreement must include the conspicuous statement that there is no guarantee the time-share can be sold at any particular price or within any period
• ✓Must clearly disclose all fees, commissions, costs, and compensation payable to the broker, directly or indirectly
• ✓Must disclose existence of any judgments or pending litigation against the broker under chapters 475, 718, or 721
• ✓A written agreement must be presented for signature within 10 days after an initial oral agreement

Resale contracts for time-share periods must contain prescribed disclosures about assessments, ownership, and closing terms.

• ✓Contract must include the prescribed 10-point capitalized statement about the current year's common expense assessment and personal liability
• ✓Must explain the form of time-share ownership and give a legally sufficient description of the period
• ✓Must disclose the name and address of the managing entity of the time-share plan
• ✓Must disclose any mandatory exchange program membership included in the plan

In criminal/contempt cases, if a party sold, leased, or advertised real estate to which they did not hold title, a presumption arises that the party was acting or attempting to act as a real estate broker, and the burden of proof shifts to that party to show otherwise.

• ✓Selling/advertising real estate not owned creates a presumption of acting as broker
• ✓Burden of proof shifts to the party to disprove broker activity

Any person, school, or institution (except accredited colleges/universities for transferable credit courses) offering real estate courses must obtain a permit from the department before commencing. Operating without a permit or guaranteeing students will pass exams is a second-degree misdemeanor.

• ✓Real estate schools must obtain a department permit before operating
• ✓Operating without a permit is a second-degree misdemeanor
• ✓May not guarantee students will pass licensure examinations

A school instructor must certify competency and obtain a permit by holding a bachelor's degree in a business-related subject with a valid broker's license, holding a bachelor's degree with extensive real estate experience and a broker's license, or passing an instructor's exam. Renewal requires a minimum of 7 hours of instruction in real estate subjects/techniques, with renewal at least every 2 years.

• ✓Instructor permit requires qualifying education/experience or passing an exam
• ✓Renewal requires minimum 7 hours of instruction training
• ✓Instructor permits renew at least every 2 years

Each permitted school must keep registration records, course rosters, attendance records, a file copy of each examination and progress test, and all student answer sheets for at least 3 years subsequent to the beginning of each course, and make them available to the department upon request.

• ✓Schools must retain records for at least 3 years after each course begins
• ✓Records must be available to the department for inspection and copying

The Commission sets forth a range of disciplinary guidelines and the ordering of penalties from lowest to highest.

• ✓Order of penalties from lowest to highest: letter of concern, reprimand, fine, probation, suspension, and revocation or denial of application
• ✓Combinations of these penalties are permissible under s. 475.25(1)
• ✓The Commission may place a licensee on probation with specified conditions such as courses, exams, inspections, or escrow reports

Specific violations carry defined penalty ranges for first and subsequent violations, escalating for repeat offenses.

• ✓Failure to maintain office/sign (475.22) or register a branch office (475.24): first violation reprimand and $500 fine to 3-month suspension and $1,000 fine
• ✓Fraud, misrepresentation, dishonest dealing, concealment, culpable negligence, breach of trust (475.25(1)(b)): first violation $2,500 fine and 30-day suspension to $5,000 fine and revocation
• ✓Second/subsequent 475.25(1)(b) violations: $5,000 fine and 6-month suspension to $5,000 fine and revocation
• ✓Penalties may be adjusted for aggravating or mitigating circumstances