Earnest Money Escrow

What Is Earnest Money Escrow?

Earnest money escrow is the process of holding an earnest money deposit in a neutral, protected account until a real estate transaction closes or terminates. In Florida, the escrow holder acts as a fiduciary, meaning they must handle the funds according to the contract terms and Florida law, not in favor of either party.

Florida Escrow Requirements

Florida law imposes specific requirements on earnest money escrow:

• Deposit deadline: The escrow holder must deposit the funds by the end of the third business day after receipt, per Chapter 475, Florida Statutes
• Separate account: Funds must be held in a dedicated escrow or trust account, never commingled with the holder's operating funds
• Record keeping: The escrow holder must maintain accurate records of all deposits, disbursements, and balances
• Disbursement rules: Funds can only be released with mutual written instructions from both parties, or by court order

When Escrow Funds Are Released

The escrow holder releases the earnest money based on the contract outcome:

• At closing: The deposit is credited toward the buyer's purchase price and closing costs
• Buyer cancels within contingency: Full refund to the buyer
• Buyer defaults: Deposit released to the seller as liquidated damages (with mutual consent or court order)
• Dispute: Funds remain in escrow until resolved

Related Terms

• Escrow — The broader concept of holding funds in trust
• Escrow Agreement — The contract governing the escrow holder's duties
• Earnest Money — The deposit being held in escrow

Barnes Walker Title Escrow

Barnes Walker Title maintains dedicated trust escrow accounts for residential and commercial earnest money deposits throughout Southwest Florida. Submit a title inquiry for assistance.

Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC