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Q I’m a broker who handles property management for landlords. Am I allowed to maintain personal or brokerage funds in the property management escrow account?

A Yes. Rule 61J2-14.010(2), Florida Administrative Code, allows a broker to place and maintain up to $5,000 of personal or brokerage funds in each property management escrow account. However, a broker may place and maintain only up to $1,000 of personal or brokerage funds in each sales escrow account.

Q A seller is planning to file a complaint against me with the Florida Real Estate Commission because he is unhappy with the way I handled the sale of his home four years ago. May he file a complaint after such a long time?

A Yes. Section 475.25(5), Florida Statutes , states that “…an administrative complaint against a broker or broker associate must be filed within 5 years after the time of the act giving rise to the complaint or within 5 years after the time the act is discovered through the exercise of due diligence.”

Q When a broker provides property management services to a landlord, must he or she hold the security deposit or advanced rents in escrow?

A No. Pursuant to Section 83.49(1)(a) and (b), Florida Statutes, the landlord has the responsibility to hold the security deposit and advanced rents in a non-interest-bearing or interest-bearing account in a Florida banking institution.

The broker needn’t hold this money unless the broker and landlord agree that the broker will do so pursuant to a property management agreement. Further, the escrow agent, holder of the security deposit and advanced rents, should be designated in the lease.

Q I’m the property manager for a residential property. According to the lease, the landlord is responsible for maintaining the security deposit in an escrow account. Since the landlord lives in South Carolina, may the security deposit be held in a South Carolina bank?

A No. First, Section 83.49, Florida Statutes, requires that all security deposits must be maintained in an escrow account or that a surety bond must be posted.

In this situation, the lease states that the landlord will maintain the security deposit in an escrow account. This same statute requires that when a security deposit is held in an escrow account, this account must be in a Florida banking institution.

Q I’m a sales associate licensed with the Department of Business and Professional Regulation (DBPR) under my legal name, William Smith; however, I’ve always gone by Bill Smith. I want to create a professional association for tax purposes. Section 475.161, Florida Statutes, stipulates that I must first register with the Department of State and then submit Form 2050 to the DBPR, advising of my status change from an associate to a PA.

I’d like my advertising to reflect Bill Smith PA, since that’s the name I use for my business. I’d also prefer that my broker pay my commissions to Bill Smith PA.  May I register with the DBPR as Bill Smith PA, or must I be registered as William Smith PA and still have all my advertising and commission checks reflect the name Bill Smith PA? 

A No to both questions. Section 475.161, Florida Statutes, states: “A license shall be issued in the licensee’s legal name only, and when appropriate, shall include the entity designation.”
Thus, if you want to become licensed as a professional corporation, you must be licensed with the DBPR as William Smith PA.

As a result, your broker will have to pay your commission checks to William Smith PA. 

But note that there is no requirement for your PA name to appear in your advertising, as long as you otherwise comply with the advertising requirements of Section 61J2-10.025, Florida Administrative Code.  

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