Florida Broker Practice Exam

Under what circumstance will the FREC NOT issue an Escrow Disbursement Order (EDO)?

1. When funds are held in a brokerage account

2. When funds are held by a title company or attorney's trust account

3. When the broker is involved in a legal dispute

4. When funds are below $1,000

The correct answer is: When funds are held by a title company or attorney's trust account

The correct choice highlights that the Florida Real Estate Commission (FREC) will not issue an Escrow Disbursement Order (EDO) when funds are held by a title company or an attorney's trust account. This stems from the understanding that title companies and attorneys are governed by different regulations than real estate brokers. Funds deposited with these entities typically have separate handling guidelines, including the requirement to follow any additional rules imposed by legal counsel or the title insurance company. In these situations, the handling of escrow funds is subject to the oversight of the relevant professional, and they follow their own established protocols to disburse funds appropriately. Because FREC’s jurisdiction primarily applies to brokers, they do not intervene in matters where funds are managed by these other parties. Thus, the FREC does not have authority to issue an EDO concerning escrow funds held outside of a broker's trust account. Other scenarios, such as funds held in a brokerage account, for example, may fall under the purview of FREC guidelines. Likewise, the involvement of a broker in a legal dispute could warrant the need for an EDO, depending on the circumstances. Even the amount of funds, while relevant in certain contexts, is not a primary barrier for FREC intervention in