State Laws Escrow Management True/False Flashcards
Authorized depositories for a broker’s escrow account include a bank, savings & loan association, trust company, credit union or title company having trust powers.
True
The broker is NOT required to be a signatory on all escrow accounts.
False
If the brokerage entity has more than one broker licensee, then one broker licensee may be designated as the signatory.
True
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.
True
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.
False:
$5,000 in property management escrow & $1,000 in brokerage escrow accounts
Brokerage operating accounts should never contain earnest money deposits or property management deposits.
True
Property management bills should be paid from the property management escrow account even if the funds from the particular property are NOT on deposit.
False:
Funds must be on deposit before paying
A broker may elect not to maintain a brokerage escrow account & instead place earnest money deposits with a title insurance company or an attorney.
True
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.
True
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.
True
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.
False:
That fact must be disclosed
A broker is required to have a quarterly reconciliation of all trust accounts.
False:
Monthly
The broker must review, sign, & date the trust account statement, reconciliation.
True
All records of escrow accounts must be retained for five years.
True
The total sum of all deposits received, pending, & being held by the broker is the broker’s trust liability.
True
The reconciled bank balance must equal up to the maximum personal business funds allowed plus the broker’s personal net worth.
False:
Broker’s trust liability
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.
True
Once opened, an interest-bearing escrow account may remain opened indefinitely.
False:
Must be closed upon disbursement
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.
True
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.
False:
Good faith doubt
If an escrow dispute is resolved, the broker is required to notify FREC within 10 business days following resolution.
True
Section 83.49 (3)(d), of the Florida Residential Landlord & Tenant act exempts brokers from FREC notification of disputes over security deposits & advance rent.
True
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.
False:
3-day notice
The Division of Real Estate, through its investigations section, may review a broker’s escrow account at all reasonable hours.
True
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.
True
A DBPR investigator has the power to suspend the license of a broker who has committed a serious infraction of Chapter 475 F.S.
False:
The investigator may only issue a notice of noncompliance, issue a citation, or file a complaint
