FLORIDA PROFESSIONAL LICENSE BLOG

Failure to Reconcile Escrow Account Will Lead to Realtor/Broker Discipline

Realtor/Broker Discipline

If you are a Florida real estate sales associate or broker who maintains an escrow account for property management you should be aware of the consequences of failing to maintain and properly reconcile monthly bank statements.  Florida requires that

 

Once monthly, a broker shall cause to be made a written statement comparing the broker’s total liability with the reconciled bank balance(s) of all trust accounts. The broker’s trust liability is defined as the sum total of all deposits received, pending and being held by the broker at any point in time. The minimum information to be included in the monthly statement-reconciliation shall be the date the reconciliation was undertaken, the date used to reconcile the balances, the name of the bank(s), the name(s) of the account(s), the account number(s), the account balance(s) and date(s), deposits in transit, outstanding checks identified by date and check number, an itemized list of the broker’s trust liability, and any other items necessary to reconcile the bank account balance(s) with the balance per the broker’s checkbook(s) and other trust account books and records disclosing the date of receipt and the source of the funds. The broker shall review, sign and date the monthly statement-reconciliation.

Rule 61J2-14.015 (2), Florida Administrative Code

 

Furthermore, the Rules of the Florida Real Estate Commission require that when the trust account liability and bank balances do not agree, the reconciliation shall contain an explanation for the differences and what corrective action was taken to make up for the shortages or overages of funds in the account.

These types of issues present serious consequences to the holder of a broker or sales associate license.  Under Rule 61J2-24.001, Florida Administrative Code, the Florida Real Estate Commission, can impose on a first time offender a minimum penalty range of from a $ 1,000 to $ 2,500 fine and 30 day license suspension to a maximum penalty of revocation of one's license.

Failure to properly reconcile funds in a property management account can result in an investigation by the Department of Business and Professional Regulation and the filing of an Administrative Complaint against the licensed real estate professional.

 

If you are the subject of an investigation by the Florida Department of Business and Professional Regulation (DBPR) or have received an Administrative Complaint or been asked to appear before the Florida Real Estate Commission (FREC) it is wise to seek advice from an experienced lawyer knowledgeable about DBPR investigations and hearings before the FREC.  For a FREE  no obligation consultation call Jeff Howell with the Tallahassee law firm of Howell, Buchan & Strong, Attorneys at Law at 850-877-7776 to schedule a telephone consult.

 

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