If the buyer walks
The broker holding the deposit cannot decide who is right. a broker holding disputed funds may not simply decide who is right — releasing the deposit to either party without authority is itself a violation†. On conflicting demands they must notify the commission within 15 business days† and start one of a defined set of procedures within 30 business days†.
Ringing the closing agent to insist the deposit is released to you does not work and cannot work, however clearly right you are. They are prohibited from acting on their own judgement. The route runs through the procedure, and every day spent arguing with the escrow holder is a day the procedure has not started.
First: was the exit contractual?
Most buyers who walk do so under a right the contract gave them, and in that case the deposit is theirs and there is nothing to dispute. Work through this before assuming bad faith.
| Exit | Deposit usually goes to | Why |
|---|---|---|
| Inside the inspection period | The buyer | The contract gave them the right |
| Financing contingency, properly evidenced | The buyer | A defined condition failed |
| Appraisal contingency, where one exists | The buyer | A defined condition failed |
| Title defect the seller could not cure | The buyer | The seller cannot deliver what was promised |
| After all contingencies, no reason | Genuinely disputed | This is where the procedure begins |
Note the fourth row cuts against sellers who have not read their own contract. A title problem you cannot clear is not the buyer walking — it is you being unable to close, and the deposit follows accordingly.
The procedure, when it is genuinely disputed
- Both sides make written demands. Until there are conflicting demands there is no dispute for the escrow holder to act on — so put yours in writing.
- The broker notifies the commission within 15 business days† of the conflicting demand.
- The broker institutes one of the settlement procedures within 30 business days†: mediation, arbitration, an interpleader action, or a request for an escrow disbursement order†.
- The funds stay put throughout. Nobody has the money in the meantime, which is the pressure that resolves most of these.
An interpleader action puts the money in front of a judge and adds legal costs for both sides — costs that on a modest deposit can approach the amount in dispute. Mediation is faster and cheaper and settles the great majority. A seller who is technically right and financially worse off at the end has won the wrong thing.
What sellers should do the same week
- Put your demand in writing to the escrow holder, with the contract provision you are relying on. Not an email arguing the merits — a demand.
- Relist immediately. Do not wait for the dispute. Time on market costs more than most deposits are worth, and holding the property off the market to strengthen a claim strengthens nothing.
- Fix whatever the buyer found. If they walked because of the roof, the panel or an open permit, the next buyer will find the same thing — and now you also know about it, which changes your disclosure position, because the duty rests on Johnson v. Davis (Fla. 1985)† and covers what you know.
- Get the inspection report if you can. Buyers frequently share it, and it is the cheapest survey of your own house you will ever be offered.
- Ask your broker to explain the timeline in writing, so you know which deadline is running.
The thing that actually reduces this happening
Almost every genuine dispute in Florida traces back to something discovered late that should have been discovered early — the roof age, the four-point failure, the open permit, the association arrear. A seller who orders their own pre-listing checks does not merely price better; they remove the events that cause a buyer to leave after their contingencies expire, which is the only category of walk that produces a fight over the deposit at all.
That is not a counsel of perfection. It is a fortnight of work and a few hundred dollars, weighed against a dispute that will occupy months and may cost more than it recovers.
Related
Common questions
Who decides who gets the deposit if a Florida sale falls through?
Not the broker — releasing disputed funds to either party without authority is itself a violation. On conflicting demands they must notify the commission within 15 business days and institute a settlement procedure within 30.
What are the escrow settlement procedures in Florida?
Mediation, arbitration, an interpleader action, or a request for an escrow disbursement order. Mediation is faster and cheaper and settles the great majority.
Can a buyer get their deposit back in Florida?
Usually yes, if they exited under a right the contract gave them — inside the inspection period, under a financing or appraisal contingency, or where a title defect could not be cured. Walking after all contingencies expire is where disputes begin.
Should I fight for the deposit?
Weigh it against the cost. An interpleader adds legal costs for both sides that on a modest deposit can approach the amount in dispute. Being technically right and financially worse off is winning the wrong thing.
Should I relist while the deposit is disputed?
Yes, immediately. Time on market costs more than most deposits are worth, and holding the property off the market does not strengthen your claim.
Escrow obligations for Florida brokers sit in §475.25 of the Florida Statutes and Rule 61J2-10.032 of the Florida Administrative Code. What the deposit is actually contingent on is set by your contract. This is general information, not legal advice on your transaction.