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Title Tip: Escrow Agent Case Letter

by | Jun 30, 2024 | Real Estate Transactions |

Once again, the Florida courts have interpreted the FRBAR contract and made it clear that having a well-trained Realtor® and expert attorney makes all the difference in closing your transaction.

In a new case, O’Donnell v. Lee, (5th DCA, June 5, 2024), the District Court determined that the seller breached a FRBAR contract because the contract stated that the escrow agent would be “TBD by seller” instead of naming an escrow agent to receive the deposit, and the seller did not timely name the escrow agent. The buyer sued for specific performance when the seller breached the contract, and the appellate court said the buyer could take the property.

In this case, there were several things the broker could have done to avoid trouble up front. First, the broker needed to clarify their role in the transaction. The court determined that the broker “represented” both sides of the transaction. Then, the court went through the record and determined that the broker worked for the seller, based on admissions from them. We do not have “dual agency” in Florida, so the broker clearly needed to educate the parties as to his role. Had the broker been working for the buyer and not deemed to be working for the seller, the broker’s failure to name an escrow agent may not have been fatal to the seller.

Second, by not identifying the escrow agent in the contract, the broker violated Rule 61J2-14.008 of the Florida Administrative Code. Section 2(b) of the rule states:

(b) When a deposit is placed or to be placed with a title company or an attorney, the licensee who prepared or presented the sales contract (“Licensee”), shall indicate on that contract the name, address, and telephone number of such title company or attorney.

This exposes the broker to liability for the seller’s breach. In this case, the sellers did in fact blame the broker for the failure to timely name an escrow agent, and the court noted the broker’s failure could be the subject of another lawsuit.

The short lesson to learn here is to clearly state your role in the transaction to the parties, and ALWAYS name your escrow agent on the contract.

With the new rules under the NAR settlement, clearly identifying your role in a written agreement is going to be mandatory come August 17, 2024. This is a great opportunity to really explain your value and your role to your customers. Also, the FRBAR and NABOR forms provide blanks identifying the escrow agent. Please make sure to always fill them in their entirety:


Florida Contract


NABOR Contract

At the Law Office of Sam J. Saad III and Paradise Coast Title & Escrow, we are committed to helping you stay informed in your practice and making you an even better Realtor®. Please call, text or email me any time with questions. I am available 24/7 at (239) 784-5556 or [email protected].