Escrow Deposit Required (Ref 2)

• The law requires deposits for a contract to purchase one or two-family dwellings be deposited in an escrow account. The deposit amount can be up to 10 percent of the purchase price. Unless waived by the buyer in writing, the deposit must be placed in an escrow account and maintained by a bank, trust company, a licensed real estate broker or Florida attorney.
  
  

72 Hour Notice

• If the buyer defaults under the purchase contract, the escrow deposit may be withdrawn by the builder or contractor. At least 72 hours prior to the withdrawal, the seller must send written notice of his intentions by certified mail to the purchaser. The seller must also present an affidavit to the escrow holder certifying that he is not in default and that the purchaser is in default of the contract of sale.
  
  

Use of Escrow Deposit

• The seller may use the escrow deposit for building purposes only. Prior to using the funds for this purpose, he must notify the buyer and acquire a surety bond in an amount that does not exceed the escrow deposit. If such a bond is not available, the seller may borrow against the escrow funds. Any interest due on the funds borrowed shall be payable by the purchaser at closing. The buyer shall then be entitled to interest that accrues on the escrow deposit.
  
  

Criminal Penalty

• It is a felony in the third degree if a developer willfully does not comply with the Florida law on the handling of consumer deposits for the purchase of a residence.