If you’re a Florida real estate agent, Realtor, or broker, you’ve told a buyer to “get the deposit to escrow” more times than you can count. But when a deal falls apart, and both sides claim the same money, do you know who holds the deposit under the Florida real estate contract, what they can do with it, and what you’re supposed to do next? Under Line 293 of the FAR/BAR AS-IS Residential Contract, the escrow agent holds the buyer’s deposit and can release it only according to the contract. That one clause decides how a Florida deposit dispute plays out, and most agents don’t read it closely until a deal goes wrong.
What the Escrow Agent Is Actually Agreeing To
Line 293 covers any closing agent or escrow agent who receives the deposit and other funds, including additional deposits and closing funds. By accepting those funds, the agent agrees to deposit them promptly, hold them in escrow in Florida, and disburse them in accordance with the contract.
Two details matter here. First, the escrow agent is a middleman, not a decision-maker: in a smooth transaction, the agent disburses exactly as the settlement statement says, the one both buyer and seller sign at closing. Second, the clause states that failure of funds to become collected doesn’t excuse the buyer’s performance. A deposit check that hasn’t cleared is not a reason to treat the buyer’s obligations as paused.
When Both Sides Claim the Deposit
Disputes come in all shapes. A seller turns off the utilities or blocks the final walkthrough. A buyer misses the loan application deadline or the deposit deadline. One side says the other is in default and demands the money.
When the escrow agent receives conflicting demands, or has a good faith doubt about who is entitled to the deposit, Line 293 gives the agent options:
- Hold the funds until the parties agree on how to split or release them
- Hold the funds until a court issues a final judgment on the parties’ rights
- Deposit the funds with the clerk of the circuit court having jurisdiction (an interpleader)
In practice, most closing agents won’t use their own judgment to pick a winner, even when one side looks clearly in default, because doing so can drag them into the dispute. Expect them to hold the money until the parties agree or a court decides.
Two more points from the clause are worth knowing. The agent isn’t liable for misdelivery of escrowed items unless it results from the agent’s willful breach of the contract or gross negligence. And if the agent is made a party to a dispute or interpleads the funds, the agent’s reasonable attorney fees and costs can be paid out of the escrowed funds, pursuant to a court order. In other words, a drawn-out dispute can cost the people fighting over the deposit. This paragraph also survives closing or termination of the contract.
If a Broker Holds the Deposit, Extra Rules Apply
The contract states that a licensed real estate broker acting as escrow agent will comply with Chapter 475 of the Florida Statutes and FREC rules to resolve escrow disputes in a timely manner through mediation, arbitration, interpleader, or an escrow disbursement order.
Under Florida Administrative Code Rule 61J2-10.032, a broker who receives conflicting demands for trust funds must give written notice to the Florida Real Estate Commission within 15 business days of the last party’s demand, and must institute one of the authorized settlement procedures within 30 business days after the last demand. Those broker-specific deadlines don’t apply the same way to funds held by a title company or an attorney, which is one reason it matters who is named as the escrow agent in your contract.
An Attorney Escrow Agent Doesn’t Have to Stay Neutral
This surprises a lot of agents. Many assume an escrow agent must be a neutral third party. Under Line 293, an attorney who represents a party and also acts as escrow agent may represent that party in an action over the deposit. If your transaction uses an attorney as escrow agent, know whose attorney they are before a dispute starts.
What to Do the Moment a Dispute Starts
- Notify the escrow agent immediately, in writing. A default, a missed deadline, a denied inspection, or a final walkthrough problem should reach the escrow agent as soon as you know about it.
- Gather your documents. The signed contract, the deadlines, and the communications that show what happened.
- Loop in your broker. Don’t try to resolve a deposit dispute on your own.
- Don’t assume the escrow agent will pick a side. Plan for the funds to stay put until the parties agree or a court rules.
- Talk to a Florida real estate attorney before taking a position on who is entitled to the money.
How to Reassure a Nervous Buyer
A buyer who has to wire money to a title company they’ve never heard of will ask whether their deposit is safe. Here’s what you can tell them. The escrow agent has to be mutually agreeable to the buyer and seller, and doesn’t have to be the closing agent or the seller’s title company. If both sides agree, it can be a title company, a closing attorney, or a broker, including the buyer’s own broker. Whoever holds the funds is bound to the same core rules: hold them in escrow in Florida and disburse only per the contract.
Before you tell a client “your money is safe,” do your due diligence. Look up the company, the broker, or the attorney, and make a call.
Where CCC Society Fits
Most agents learn how escrow disputes work after a deal goes sideways. If you’ve ever lost a deal, watched a deposit get stuck, or just want to stop guessing what a clause means, CCC Society walks Florida agents through the FAR/BAR AS-IS Contract line by line, including this clause. Tiffany Pantozzi and Natalie Zagury are practicing professionals in the field, and they explain what each line means in plain English and how to use it in a real transaction.
Ready to feel confident when a client asks, “Who has my money, and what happens if this falls apart?” Join CCC Society today.
👉 contractclosechampagne.com/ccc-society
Key Takeaways
- Under Line 293, the escrow agent holds the deposit and closing funds in Florida and disburses them only per the contract
- Failure of funds to become collected doesn’t excuse the buyer’s performance
- When there are conflicting demands, the escrow agent can hold the funds until the parties agree or a court decides, or interplead with the clerk of the circuit court
- Licensed brokers holding escrow follow Chapter 475 and FREC rules, including 15-business-day notice and 30-business-day settlement deadlines
- An attorney escrow agent may represent a party in a deposit dispute
- Notify the escrow agent immediately when a default or dispute arises
FAQ
What does an escrow agent do in a Florida real estate contract? The escrow agent holds the buyer’s deposit and other funds in escrow within Florida and disburses them only in accordance with the contract, typically per the settlement statement signed at closing.
What happens to the escrow deposit if the buyer or seller defaults? If both sides claim the deposit, the escrow agent may hold the funds until the parties agree or a court decides, or deposit them with the clerk of the circuit court (interpleader).
Who can be the escrow agent in a Florida real estate transaction? Anyone the parties agree on, such as a title company, closing attorney, or broker. It doesn’t have to be the closing agent.
Does an escrow agent have to be neutral if they are also an attorney? No. Under Line 293, an attorney who represents a party and also acts as escrow agent may represent that party in an action over the deposit.
Disclaimer: Content provided by Contract Close Champagne is for educational purposes only and does not constitute formal legal advice. Always consult a licensed Florida real estate attorney for specific guidance.
