That can be frustrating when your cash is tied up in a deal that fell apart. This page explains why the agent holds the funds, what your purchase contract likely controls, and which steps build a useful record. It covers commercial and business-asset deals in general terms. Ayala Law PA handles business, contract, and real estate disputes in Florida courts and arbitration, including matters for businesses in Hillsborough County and the Tampa Bay area. Eduardo A. Maura is the responsible lawyer for this page.
Why an Escrow Agent Keeps Earnest Money Frozen
An escrow agent keeps earnest money frozen because it holds the funds as a neutral party, not as a judge of who is right. It doesn’t pick a winner between the buyer and the seller.
The agent works from the contract and written instructions. When the buyer says the deposit is owed back and the seller says it was earned, the agent faces two conflicting claims. Paying one side could expose the agent to a claim from the other. So the agent holds the funds while the dispute plays out.
Most frozen deposits move in one of three ways. The parties sign a written release. A court enters an order. Or an arbitrator issues an award. If your contract has an arbitration clause, Florida law treats a written agreement to arbitrate as valid and enforceable, except on grounds that allow a contract to be revoked § 682.02. Commercial deals vary. A lease deposit, a business sale, and a land purchase can each use different release terms, so read your own paperwork first.
If your deposit is stuck on a deal that stalled, we can talk through your contract and its deadlines with you. Talk it through with our team — we can walk you through how a situation like yours is usually handled and what your options are.
What the Purchase Contract Says About Escrow
Your purchase contract usually decides who can authorize release of the deposit. Start with the earnest money clause, the escrow agent’s named duties, and the release conditions.
Look for four things. First, the identity of the escrow holder, which may be a title company, an attorney, or a broker. Second, the conditions for release, such as closing, a mutual written instruction, a court order, or an arbitration award. Third, default and forfeiture language, which says what happens to the deposit if the buyer fails to close. Fourth, any mediation or arbitration clause for disputes.
Read every amendment and extension, too. A later change to a deadline or deposit term can override the original language.
Florida courts also review unfair terms closely. To refuse to enforce a contract term as unconscionable, a court must find both unfair deal-making and unfair terms, weighed together (Basulto v. Hialeah Automotive). A harsh forfeiture clause is not automatically thrown out for that reason alone.
Oral side deals about the deposit still face the basics. Florida requires an offer, acceptance, consideration, and essential terms stated clearly enough (St. Joe Corp. v. McIver). Proving a verbal deal is harder than proving a signed writing.
Common Causes of Deposit Disputes
Most frozen deposits come from a disagreement over whether a condition was met or whether someone defaulted.
- Unmet contingency. A buyer says a financing, inspection, or due diligence condition failed and wants the deposit back.
- Claimed default. A seller says the buyer walked away and wants to keep the deposit as its remedy.
- Title, survey, or boundary issues. A commercial parcel may show a title or survey problem late in due diligence. Each side may read the fix differently.
- Timing of notices. One side says a notice arrived on time. The other says it came late or never came.
- Closing date fights. Either side may claim the other moved or missed the closing date.
- Conflicting instructions. Each side sends the agent a different written demand, so the agent releases nothing.
The common thread is the record. A clear, dated paper trail makes each side’s position easier to test.
Sending a Written Demand for Release
A written demand for release gives the escrow agent and the other side a clear, dated statement of what you want and why.
Address the demand to the escrow agent and to the other party. Cite the contract clause that supports release. State the amount, who holds it, and the basis for your claim. Set a reasonable response deadline.
Keep copies of everything. Save proof of delivery, such as email timestamps or certified mail receipts. Save any reply from the agent. These documents become part of the record if the dispute goes to court or arbitration.
Ask the agent, in writing, for the specific reason it won’t release the funds. Ask whether it plans to file an interpleader. The answer shows you what the agent needs before it will act.
Stick to facts and the contract. A calm letter that matches the contract is easier to follow than an angry one.
Interpleader and Depositing Funds with the Court
An interpleader is a court case where the escrow agent asks a judge to decide who gets the deposit. The agent often pays the money into court as part of that filing.
Once the agent files and deposits the funds, it usually steps out of the fight. The buyer and seller then argue over who is entitled to the money before the judge. The agent is no longer holding the money for either side.
If you are named in an interpleader, you must respond on time. Calendar every date in the filing right away. A missed response deadline can hurt your position.
Where the case is filed also matters. Florida law says actions must be brought in the county where the defendant resides, where the cause of action accrued, or where the property in litigation is located (§ 47.011). Under Fla. Stat. § 47.011, actions must be brought only in the county where the defendant resides, where the cause of action accrued, or where the property in litigation is located, and this section does not apply to actions against nonresidents.
How the Deposit Fight Connects to Specific Performance or Damages
The deposit question often sits inside a larger claim. A buyer may want the sale to close, or a party may want money for a deal that broke down.
Specific performance asks a court to order the sale to close. Florida gives one year to bring an action for specific performance of a contract (§ 95.11). A contract clause that sets a shorter filing window is void (§ 95.03). The clock generally starts when the cause of action accrues (§ 95.031), so track that date from the start.
The deposit can play several roles. It may be a credit toward damages, a sum the contract sets in advance for breach (liquidated damages), or money owed back. The contract’s wording decides which role it plays.
A claim to recover the deposit under unjust enrichment has limits. Where an express contract covers the same subject, claims from that relationship generally won’t support unjust enrichment (Williams v. Johnson). The deposit claim usually rests on the contract itself.
Timing can also matter. Ratification occurs when a party with the right to cancel a voidable contract fails to cancel it after learning the facts that warrant cancellation (Flaherty v. Flaherty). Acting as if the deal is still on can affect that right. If the contract has a provision allowing attorney’s fees to a party when that party is required to take any action to enforce the contract, and it was entered into on or after October 1, 1988, a court may allow reasonable fees to the other party when that party prevails on the contract (§ 57.105).
Not sure what your next step is?
Talk it through with our team — we can walk you through how a situation like yours is usually handled and what your options are.
Steps to Take Now
Start by gathering your records. Collect the signed contract, all amendments, notices, emails, text messages, and the deposit receipt.
Next, calendar every contract deadline in writing. Include any notice-and-cure period, which gives the other side time to fix a problem after receiving notice.
Avoid self-help. Don’t withdraw funds from an escrow account, and don’t send messages that threaten the other side. Those moves can complicate the record.
Check the contract for an arbitration or mediation clause. If an agreement to arbitrate exists, a court must order arbitration on a party’s motion when the other side refuses; if the refusing side opposes the motion, the court decides summarily whether an enforceable agreement exists, and it cannot refuse because the claim lacks merit (§ 682.03). In many civil damages cases, a court must refer the case to mediation on a party’s request if the requesting party is willing and able to pay the costs of the mediation or the costs can be equitably divided between the parties, subject to listed exceptions (§ 44.102). Fla. Stat. § 44.102 reads: “(2) A court, under rules adopted by the Supreme Court: (a) Must, upon request of one party, refer to mediation any filed civil action for monetary damages, provided the requesting party is willing and able to pay the costs of the mediation or the costs can be equitably divided between the parties, unless: 1.”
Finally, treat every court filing as urgent. Each one carries its own response deadline.
When to Contact a Business Litigation Lawyer
Call a business litigation lawyer when a deal stalls, the deposit matters to your business, and the other side won’t sign a release. A common picture is a commercial property or business-asset sale that fell apart, with the agent holding the money and both sides blaming each other.
Ayala Law PA’s commercial litigation and real estate litigation work covers deposit disputes, contract enforcement, and specific performance claims in Florida courts and arbitration. The firm works with business owners, investors, developers, buyers, and sellers.
The firm’s only office is at 1646 W Snow Ave, Tampa, Florida. This page serves businesses in Tampa and Hillsborough County. Responsible lawyer for this page: Eduardo A. Maura.
If your earnest money is held up on a deal that stalled, call (305) 570-2208 or send a note through our contact form to talk through the contract and the deadlines.
Frequently Asked Questions
Can an escrow agent release earnest money without both parties agreeing?
Usually not.
What is an interpleader action?
It is a case where the escrow agent asks a court to decide who gets the deposit. The agent often pays the money into court.
Can a buyer get earnest money back after a commercial deal falls through?
Sometimes. The answer turns on the contract’s contingency and default terms.
Does a seller automatically keep the deposit after a buyer defaults?
Not automatically. The contract’s forfeiture or liquidated damages language controls.
How long do I have to sue over a failed commercial property deal in Florida?
For a specific performance claim, Florida gives one year (§ 95.11).
