FL Real Estate Unit 5, Kaplan/Keller Williams

Brokerage Office

A real estate office operated by a licensed broker and registered with the DBPR.

Active Status

A broker's license status that allows the broker to legally operate a brokerage office.

DBPR

Department of Business and Professional Regulation; the agency that regulates Florida real estate licenses.

Brokerage Office Sign

A sign that must display the broker's registered name and trade name (if any).

Trade Name

The business name under which a brokerage operates.

Advertising

Any promotion of real estate or real estate services by a broker or brokerage.

Blind Advertising

Advertising that does not include the brokerage's registered name; illegal in Florida.

Broker

The person responsible for all brokerage activities, advertising, and escrow funds.

Sales Associate

A licensed real estate professional who works under the supervision of a broker.

Listing

A contract giving a broker the right to market or sell a property.

Escrow (Trust) Funds

Money or property entrusted to a broker until the terms of a transaction are completed.

Escrow Account

A special account used to hold escrow funds separate from the broker's personal or business funds.

Earnest Money

A buyer's good-faith deposit showing serious intent to purchase a property.

Commingling

Mixing escrow funds with personal or business funds; illegal.

Conversion

Using escrow funds for personal or business purposes; illegal.

Trust Account

A bank account where escrow funds are held.

Title Company Escrow Account

An escrow account maintained by a title company that may hold escrow funds.

Attorney Trust Account

A trust account maintained by an attorney that may hold escrow funds.

FREC

Florida Real Estate Commission; regulates real estate licensees and handles escrow disputes.

Escrow Dispute

A disagreement over who is entitled to escrow funds.

Settlement Procedures

The legal methods used to resolve an escrow dispute.

Mediation

A voluntary settlement process where a neutral third party helps both sides reach an agreement.

Arbitration

A dispute resolution process where a neutral third party makes a binding decision.

Litigation

A court process in which a judge decides the outcome of a dispute.

Escrow Disbursement Order (EDO)

A binding order issued by FREC directing a broker how to distribute disputed escrow funds.

Business Days

Days used to calculate legal deadlines, excluding weekends and legal holidays.

Three-Business-Day Rule

Escrow funds must be deposited no later than the third business day after receipt.

Fifteen-Business-Day Rule

A broker must notify FREC within 15 business days after learning of an escrow dispute.

Recordkeeping

The requirement that brokers maintain transaction and escrow records.

Five-Year Rule

Brokers must keep escrow and transaction records for at least 5 years.

Two-Year Litigation Rule

If there is litigation, records must be kept for at least 2 years after the lawsuit ends, even if that exceeds 5 years. What must a broker do to have active status?

What 2 things must appear on a brokerage office sign?

The trade name (if any) and the broker's name.

Can a sales associate have their own office sign?

No. Only the broker's office can have a brokerage sign.

Who is responsible for all advertising?

The broker.

What must every real estate advertisement include?

The registered brokerage name.

Can a sales associate advertise without the broker's permission?

No.

Can a broker advertise property they don't have permission to sell?

No.

What is blind advertising?

Advertising property without the brokerage name.

Is blind advertising legal?

No.

Who owns listings taken by a sales associate?

The broker.

What are escrow (trust) funds?

Money or property held by a broker until a transaction is completed.

Who holds escrow funds?

The broker holds them in trust for others.

Where can escrow funds be deposited?

In a Florida escrow account, title company escrow account, attorney trust account, or with the FREC if directed.

How many business days does a broker have to deposit escrow funds?

3 business days.

Can a broker mix personal money with escrow money?

No, except up to $1,000 to cover bank service charges.

What is commingling?

Mixing personal or business funds with escrow funds.

Is commingling legal?

No.

What is conversion?

Using escrow funds for personal or business use.

Is conversion legal?

No. It is a serious violation.

How long must brokers keep escrow records?

At least 5 years.

How long must escrow records be kept if there is litigation?

At least 2 years after the lawsuit ends.

What should a broker do if there is an escrow dispute?

Notify FREC and follow an approved settlement procedure.

How many business days does a broker have to notify FREC of an escrow dispute?

15 business days.

What is the purpose of escrow settlement procedures?

To determine who legally receives the escrow funds.

What are the four escrow settlement procedures?

Mediation, Arbitration, Litigation, and Escrow Disbursement Order (EDO).

What is mediation?

A neutral third party helps both sides reach a voluntary agreement.

Is mediation binding?

Only if both parties agree.

What is arbitration?

A neutral third party hears the dispute and makes a binding decision.

Is arbitration binding?

Yes.

What is litigation?

A judge settles the dispute in court.

What is an Escrow Disbursement Order (EDO)?

A binding order from FREC telling the broker how to distribute escrow funds.

When is an Escrow Disbursement Order (EDO) used?

When the broker asks FREC for instructions on an escrow dispute.

What is earnest money?

A deposit made by the buyer to show they are serious about purchasing the property.

Who is responsible for escrow violations?

The broker.

What is the purpose of an escrow account?

To safely hold other people's money until the transaction is completed.

Can a broker keep escrow funds in a personal bank account?

No.

What does DBPR stand for?

Department of Business and Professional Regulation.

What does FREC stand for?

Florida Real Estate Commission.