State Laws Escrow Management True/False

Question 1

Authorized depositories for a broker’s escrow account include a bank, savings & loan association, trust company, credit union or title company having trust powers.

Answer 1

True

Question 2

The broker is NOT required to be a signatory on all escrow accounts.

Answer 2

False

Question 3

If the brokerage entity has more than one broker licensee, then one broker licensee may be designated as the signatory.

Answer 3

True

Question 4

If the escrow deposit is in securities, intended by the depositor to be converted into cash, the conversion must be made at the earliest practical time, & the proceeds immediately deposited in the account.

Answer 4

True

Question 5

The broker cannot deposit any funds unrelated to specific real estate transactions other than a maximum amount of $1,000 of his own money in a property management escrow account & $5,000 of his own money in a brokerage escrow account.

Answer 5

False:
$5,000 in property management escrow & $1,000 in brokerage escrow accounts

Question 6

Brokerage operating accounts should never contain earnest money deposits or property management deposits.

Answer 6

True

Question 7

Property management bills should be paid from the property management escrow account even if the funds from the particular property are NOT on deposit.

Answer 7

False:
Funds must be on deposit before paying

Question 8

A broker may elect not to maintain a brokerage escrow account & instead place earnest money deposits with a title insurance company or an attorney.

Answer 8

True

Question 9

When a deposit is to be placed with a title company or an attorney, the contract MUST include the name, address, & telephone number of the title company or attorney.

Answer 9

True

Question 10

If a binder deposit is placed in an account designated by the buyer or the buyer’s broker, the selling broker MUST, within 10 business days after each deposit is due under the sales contract, make written request to the title company or attorney to provide written verification of receipt of the deposit.

Answer 10

True

Question 11

If a deposit is placed in an account designated by the buyer or the buyer’s broker & there is no verification of deposit received by the selling broker, there is no requirement to notify the seller or listing broker.

Answer 11

False:
That fact must be disclosed

Question 12

A broker is required to have a quarterly reconciliation of all trust accounts.

Answer 12

False:
Monthly

Question 13

The broker must review, sign, & date the trust account statement, reconciliation.

Answer 13

True

Question 14

All records of escrow accounts must be retained for five years.

Answer 14

True

Question 15

The total sum of all deposits received, pending, & being held by the broker is the broker’s trust liability.

Answer 15

True

Question 16

The reconciled bank balance must equal up to the maximum personal business funds allowed plus the broker’s personal net worth.

Answer 16

False:
Broker’s trust liability

Question 17

Escrow money may be placed in an interest-bearing account if the parties to the contract agree on the distribution of interest & the account is in a Florida federally-insured institution.

Answer 17

True

Question 18

Once opened, an interest-bearing escrow account may remain opened indefinitely.

Answer 18

False:
Must be closed upon disbursement

Question 19

The buyer has the right to withdraw the offer & withdraw the earnest money deposit up to the time the seller accepts the offer to purchase.

Answer 19

True

Question 20

When no demand has been made for escrowed funds but the broker is uncertain as to who is entitled, the broker is said to have conflicting demands.

Answer 20

False:
Good faith doubt

Question 21

If an escrow dispute is resolved, the broker is required to notify FREC within 10 business days following resolution.

Answer 21

True

Question 22

Section 83.49 (3)(d), of the Florida Residential Landlord & Tenant act exempts brokers from FREC notification of disputes over security deposits & advance rent.

Answer 22

True

Question 23

Chapter 83 F.S requires the property manager broker to give a 30-day notice to pay before filing a complaint demanding possession of a residential rental property.

Answer 23

False:
3-day notice

Question 24

The Division of Real Estate, through its investigations section, may review a broker’s escrow account at all reasonable hours.

Answer 24

True

Question 25

A DBPR investigator has the power to issue a notice of noncompliance for a first offense; issue a citation if there is no serious infraction; or docket a complaint to the Division.

Answer 25

True

Question 26

A DBPR investigator has the power to suspend the license of a broker who has committed a serious infraction of Chapter 475 F.S.

Answer 26

False:
The investigator may only issue a notice of noncompliance, issue a citation, or file a complaint