Johnson v. Davis: sellers (and their agents) must disclose known material defects not readily observable to the buyer.
Before you read
Test yourself first: 5 questions
Question 1 of 5
In what situation does Florida law specifically permit DESIGNATED SALES ASSOCIATES?
Answer: A. Designated sales associates are allowed only in NONRESIDENTIAL transactions where each party's assets meet the $1 million threshold and both parties sign disclosures requesting designated representation. This lets two associates in the same brokerage each act as single agent for opposing parties in a commercial deal.
Question 2 of 5
A Florida sales associate receives an earnest money deposit. By when must the deposit be delivered to the broker (or the broker's escrow account) under FREC rules?
Answer: B. A sales associate must deliver escrow funds to the broker by the end of the next business day. The broker then must deposit the funds into the escrow account no later than the end of the third business day after the associate received them.
Question 3 of 5
A broker must deposit trust funds into the brokerage escrow account no later than the end of which business day after the funds are received by the brokerage?
Answer: C. Florida requires brokers to deposit escrow funds into the trust account by the end of the third business day following receipt of the funds by the brokerage.
Question 4 of 5
The improper mixing of a broker's personal or business funds with clients' escrowed trust funds is known as:
Answer: B. Commingling is mixing trust (escrow) funds with the broker's own money. Conversion is the unauthorized use of those funds. Both are serious license-law violations in Florida.
Question 5 of 5
When a broker holds escrowed funds and the buyer and seller make conflicting demands that the broker cannot resolve, which of the following is NOT one of the settlement procedures FREC authorizes?
Answer: D. When faced with conflicting demands, a Florida broker must use one of the authorized settlement procedures: request an EDO from FREC, mediate, arbitrate, or interplead/litigate. Simply paying out the first claimant is improper.
Keep the streak going with more questions like these, each with a full rationale.
Must-know rules
- Escrow/trust deposits must be placed with the broker within 3 BUSINESS DAYS of receipt.
- Johnson v. Davis: sellers (and their agents) must disclose known material defects not readily observable to the buyer.
- Documentary stamp tax on deeds: $0.70 per $100 of consideration statewide; $0.60 per $100 in Miami-Dade County.
- Homestead exemption: up to $50,000 off assessed value for a qualifying primary residence.
- Save Our Homes: caps annual increase in assessed value of homestead property at 3% per year.
- Florida is NOT a community property state (it is a common-law / equitable distribution state).
- Escrow disputes: broker must notify FREC and may use escrow disbursement order, mediation, arbitration, or litigation (interpleader).
Florida Disclosures, Escrow & Key Numbers Cheat Sheet: FAQs
Is Florida Disclosures, Escrow & Key Numbers Cheat Sheet on the real estate exam?
Yes. State License Law is a scored domain on the Florida real estate licensing exam, and this topic appears in the state license-law portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
Does Florida test this differently?
Florida applies its own license law on top of the national portion. This page covers the Florida rules specifically, which is what the state section of your exam tests.
