There are no guarantees in real estate transactions. One minute you could have what looks like the perfect deal, beneficial to both buyer and seller, and the next things begin to crumble right in front of you. When a deal falls apart, an escrow deposit dispute might not be far behind.
We’ve handled many such cases. In one of them, our client was a couple looking to buy their first home. Unfortunately, when they applied for a home loan, the bank denied their application. Rather than call it a loss and put the house back on the market, the seller decided to seek to retain the escrow deposit because of the breach of contract. Had our client hired us from the beginning of the process rather than after the fact for the escrow deposit dispute that ensued, we would have advised them to include a financing contingency in the contract. But because they tried to do it on their own, they left themselves vulnerable. Luckily, we were able to resolve the dispute and get them their money back.
If you don’t want to go through a similar situation, here’s what you need to do.
Review Your Contract
If you want to put protections in place that will help you avoid a dispute from the beginning, you should really hire an attorney to help you through the process. However, if you do find yourself in an escrow dispute, you can still minimize damage. Like most other legal disputes, the first place you should look when trying to come to a resolution is the contract. It is likely that your contract and applicable Florida law contains the answer to how a dispute should be resolved.
The escrow agent in charge of holding the deposit may continue to hold on to the money until both parties come to an agreement or until the court hands down a final judgment. Alternatively, if the agent is a licensed Florida real estate broker, he or she must notify the Florida Real Estate Commission of the dispute within 15 days of receiving conflicting demands for the escrow deposit. Once the escrow agent notifies the FREC, the agent can request a disbursement order, seek adjudication by the court, and submit the matter to arbitration or mediation.
Once the Escrow Deposit Dispute is Resolved
After the court makes a judgment, both parties can still seek to recover the funds by filing a civil action. Before it gets to this point, it is critical that both buyer and seller hire an experienced real estate attorney.
There is no one-size-fits-all approach to reaching a resolution in an escrow deposit dispute, but there is a way to help prevent them from occurring in the first place. Hiring an attorney to look over your contract and help you through the transaction process can save you a lot of time, money, and stress.
Need a resolution to your escrow deposit dispute? Call AM Law today at 305-441-9530.