Establishing Escrow Accounts
When earnest money is received, the broker must deposit it in an escrow account. An escrow account is an account for the deposit of money held by a third party in trust for another for safekeeping. Escrow deposits also called (trust funds) include cash, checks, and money orders and items that can be converted into cash such as deeds and personal property.
Brokers also hold in trust, rent and security deposits associated with leasing property. Brokers are not required to keep earnest money deposits separate from rental deposits. Earnest money is also referred to as good-faith deposits or binder deposits.
Florida law defines a deposit as money or its equivalent, delivered to a real estate licensee as earnest money, payment or partial payment in connection with a real estate transaction.
Escrow funds cannot be commingled with the broker's personal funds or operating funds. Commingling funds is the illegal practice of mixing a buyer, seller, tenant, or landlord funds with the broker's own money or mixing escrow money with the broker's personal or brokerage funds.
Types of monies that a broker handles
Sales deposits (earnest money)
Property management (rent)
Money paid by sellers for marketing expenses not covered by broker.