Q: I represent a seller who entered into a contract for sale/purchase with a buyer about a month ago. The contract just fell through and both the seller and the buyer have placed demands on the earnest money deposit, which is being held in escrow by the title company. I don’t maintain an escrow account. Since I’m not holding the funds in escrow, do I have to notify the Florida Real Estate Commission (FREC) of the dispute?
A: No. You don’t have an obligation to notify FREC of such a dispute since you aren’t holding the funds in escrow. Additionally, FREC doesn’t regulate title companies and thus has no authority to dictate what the title company does with the funds. A title company faced with conflicting demands as described above is likely to maintain the funds in escrow until the buyer and seller resolve their dispute or file an interpleader action.