Q: The seller walked away from a purchase and sale contract three days before closing. The buyer presented a release and cancellation, but the seller refused to sign, claiming entitlement to the deposit, which was being held by a local title company. Who notifies the Florida Real Estate Commission (FREC) of the escrow dispute?
A: In this instance, no one would be notifying FREC. Section 61J2-10.032(1)(a), Florida Administrative Code, requires a real estate broker to notify FREC within 15 business days after receiving conflicting demands on trust funds maintained in the broker’s account, but this provision does not apply to title companies.
In most cases, a title company will require clear written instructions from both parties before releasing the deposit. If the parties can’t provide matching instructions within a reasonable period, the title company will likely deposit the funds with the local clerk of courts, and either party may then file a court case to argue why they believe they’re entitled to the deposit.