Escrow: The Rules Have Changed As of Dec. 6, 2007, a rule change places new responsibilities on real estate licensees when an attorney or title company holds deposit money pursuant to the terms of a sales contract. Here’s a review of the recent changes made by the Florida Real Estate Commission to Rule 61J2-14.008, Florida Administrative Code.
The rule’s new language, set forth in Paragraph 2(b), outlines three new responsibilities that affect real estate licensees when a deposit is “placed or to be placed” with an attorney or title company according to the terms of a sales contract. The First New Responsibility
This requires the licensee who prepares or presents the sales contract to include in the contract the name, address and telephone number of the attorney or title company that will serve as escrow agent. Previously, Rule 14.008 required only the name and address of the title company or attorney to be included in the sales contract.
The most recent versions of the FAR Residential Sale and Purchase contract (FAR- 9), and Vacant Land contract (VAC-9), as well as the latest versions of the FAR/BAR contract (FAR/BAR-8) and FAR/BAR “As-Is” contract (FAR/BAR ASIS-2) include blank lines for this required information. You can find these forms at floridarealtors.org. The Second New Responsibility
Now, the broker of the licensee who prepares or presents the sales contract is required to make written request to the attorney or title company, within three business days after a deposit is due under the sales contract, seeking that entity’s written verification of its receipt of the deposit.
Previously, Rule 14.008 stated that “the licensee shall obtain and retain written verification of said deposit upon delivery of the funds to the title company or attorney.” The new version of Rule 14.008 mandates that the broker make a written request, that the written request seek written verification from the attorney or title company of its receipt of the deposit and that it be made within three business days after each deposit is due. The Third New Responsibility
This rule requires the broker of the licensee who prepares or presents the sales contract to provide an additional written notification either to the seller’s broker or, if the seller is not represented by a broker, to the seller directly.
Specifically, the rule now provides that within 10 business days from making the written request just discussed, the broker must provide the seller’s broker, or the seller directly if the seller is not represented by a broker, a copy of the written verification provided by the attorney or title company.
If the broker does not receive written verification of receipt of the deposit from the attorney or title company within 10 business days of making the request, the rule requires that the broker provide written notice within the 10 business days to the seller’s broker (or to the seller directly if the seller is not represented by a broker) that the broker did not receive the verification of receipt.
As stated earlier, the requirements set forth in Paragraph 2(b) of the rule apply when a deposit is placed or to be placed with an attorney or title company pursuant to the terms of a sales contract. If you have questions about the rule changes, contact FAR’s Legal Hotline, Monday through Friday from 9 a.m. to 5 p.m. at (407) 438-1409. Please have your real estate license number available when you call.