When can a broker retain escrow funds?

• A. When a dispute arises regarding commission amount due to the broker
• B. When the buyer defaults on performance
• C. When there is any disagreement about who owns the funds
• D. Never; funds must always be released immediately

Answer: (A)

In Florida, escrow funds are held in trust and not released until the rightful owner is determined. A broker may retain escrow funds when there is a bona fide dispute over the amount of the broker’s commission. Since the broker’s compensation is at stake, withholding the disputed portion protects the broker’s interest while the matter is resolved through mutual agreement or a court decision.

Disputes about buyer defaults or general disagreements over ownership don’t automatically justify withholding funds; those situations require following the contract terms, or obtaining a court order or mutual agreement for disposition. And funds aren’t released immediately in every case—the rules require proper resolution of who is entitled to the funds.