Chapter 4 - Escrow Management Flashcards
When does a Broker have to deposit Escrow funds?
No later than the end of the third business day after their sales associate or any employee of the brokerage received the funds.
Broker and sales associates deadlines run concurrently with each other.
How long does a Sales Associate have to turn over Escrow funds to their Broker?
By the end of the next business day after it was received
What are the procedures for accepting a post-dated escrow check for deposit?
Note on the contract who the payee is on the check and the date of the check
Secure the check in a safe place in the office (a safe) until the date of the check arrives, then immediately deposit the check on that day.
When is a broker liable/responsible for an Escrow check that bounces?
When the check was not timely deposited because of the broker’s culpable negligence
What are the requirements for signatories on escrow accounts?
The broker shall be a signatory on all escrow accounts
What is the difference between mediation and arbitration?
Mediation: informal, non-adversarial, non-binding. Must be completed within 90 days of the last conflicting demand for an escrow deposit.
Arbitration: formal, adversarial, binding. Both parties to the escrow dispute must agree in advance to be bound by the arbitrator’s decision.
What notification is required if a title agent is holding the escrowed funds, and there are conflicting demands made for return of the money?
No requirement to report the escrow dispute to FREC;
No requirement to institute escrow settlement procedures;
Usually goes to litigation.
What are the exceptions to providing notice to FREC of an escrow dispute?
HUD property being sold on a HUD contract. Follow HUD Agreement to Abide program guidelines instead.
Condominium (new: 15 days to cancel; resale: 3 days to cancel) = no questions asked.
If the buyer, in good faith, fails to satisfy the financing terms of the contract [NOT RECOMMENDED}
When shall a broker notify FREC of an escrow dispute?
IF the broker is holding the funds in his escrow account (not in a title company), he must notify FREC of the dispute within 15 days of the last conflicting demand.
When is a broker required to institute settlement procedures for an escrow dispute?
Within 30 days of receiving conflicting demands.
When is a broker required to inform FREC when an EDO that has been requested is resolved by other means?
Within 10 business days of the settlement.
