We all go into an escrow process hoping for the best: A relaxed process with no delays, where everyone walks out feeling good about the result. This is a dream scenario for sellers and buyers alike, and proper planning ensures that it’s the standard for most transactions.

Escrow Disputes in Florida

An escrow dispute starts when one of the parties steps out of the transaction or refuses to sign the closing documents. This could happen for a number of reasons, with the most common of them being the failure to meet one of the clauses in the escrow agreement.

In other cases, the dispute stems from unclear instructions in the escrow agreement. Conflict is all the more likely when both parties aren’t on the same page regarding methods of payment or the distribution of funds. If both the seller and the buyer feel entitled to the earnest money, it can be hard to get them to trust the process without the intervention of a neutral third-party.

Whatever the cause, there’s always a specific result that turns a transaction into an escrow dispute: one or both parties refuse the disbursement of the funds in the escrow account.

This is where escrow agents need to step in. They protect the clients’ investment and take the necessary steps when there is good faith doubt over who is entitled to the funds. It’s not up to the escrow agent to make the final decision, but their role is just as important to get a quick resolution to the conflict.

Look Into the Contract

Contracts are the key to solving many escrow disputes. They’re meant to minimize legal ramifications and show where each party stands on the dispute.

That’s why reviewing the contract is the standard approach at the start of a potential dispute. When drafted correctly, the escrow contract will list the available mediation period and what to expect from the escrow agent who’s tasked with holding the funds.

Real estate disputes statewide are regulated by the Florida Association of Realtors (FAR) contract or the Florida Association of Realtors/Florida Bar (FAR/BAR) form of contract.

American law firm Icard Merrill states that, under the FAR contract, buyers and sellers are granted a period of 30 days to resolve the conflict through mediation. By contrast, the FAR/BAR contract doesn’t require a period of mediation before the escrow agent decides to submit the dispute so it’s handled in court.

The Role of an Escrow Agent

Both buyers and sellers have a big responsibility while handling escrow disputes in Florida.

First and foremost, an escrow agent has the right to keep the funds in the escrow account if they have doubts about which of the parties is entitled to the money. In practice, this means that escrow agents can hold the funds until both parties reach a mutual agreement or until the dispute is resolved in court.

If the escrow agent is a licensed Florida broker, they’re also expected to report such cases to the Florida Real Estate Commission (FREC). The report must be issued within fifteen days of receiving conflicting demands.

As described by Law Offices of Jarrett R. Williams, P.A, the escrow agent can choose any of the following methods to solve the dispute:

• Request an escrow disbursement order from the FREC explaining how to distribute the funds and who is entitled to the escrowed property.

• Submit the dispute to arbitration or mediation, with the consent of all parties.

• Seek court adjudication of the matter by interpleader or otherwise. This means that the broker files a lawsuit so the court can determine how to distribute the funds.

If you’re a buyer or a seller, it’s important to note that the support of an escrow agent doesn’t go as far as providing legal advice in the middle of an escrow dispute. Escrow agents are there to outline the terms of the contract for clients and explain the next steps enforced by the law, but legal advice should be left to the client’s lawyers.

Secure the Best Support Network During an Escrow Dispute

Florida’s active real estate market requires escrow professionals of the highest caliber. Clients have high expectations and agents are expected to stay on top of changes in the economic landscape.

The specialists at Key Title & Escrow have assisted clients through countless negotiations, often providing the means to stop things from escalating into a dispute. We know how to keep an eye on different factors at once because we understand how unclear contract clauses, unreasonable demands, or inaccurate records can ring alarm bells in a client’s mind. That’s why Key Title & Escrow comes prepared to offer multiple contingency plans before the escrow agreement.

Secure the best assistance for your real estate purchase so you can be ready if there are problems along the way. Just call (305) 235-4571 or toll-free at (800) 547-0006. Another via to reach our specialists is the contact form on this page. You can count on us for all your title and escrow needs!