Key Takeaways
- Managing Brokers must maintain escrow accounts for client funds
- Commingling personal and escrow funds is prohibited
- Earnest money must be deposited promptly according to contract terms
- Interest-bearing escrow accounts require written authorization
- IDFPR can audit escrow accounts at any time
Last updated: January 2026
Escrow & Trust Accounts
Proper handling of escrow funds is critical for Illinois licensees.
Escrow Account Requirements
Who Maintains Escrow
| Responsibility | Details |
|---|---|
| Managing Broker | Must maintain account |
| Sponsored Brokers | Cannot hold escrow |
| Title company | Alternative holder |
Account Requirements
| Requirement | Details |
|---|---|
| Separate account | From operating funds |
| Designated | "Escrow" or "Trust" |
| FDIC insured | Bank account |
| Illinois bank | Must be in state |
| Records | Detailed accounting |
Depositing Funds
Timing
| Situation | Requirement |
|---|---|
| Per contract | Follow contract terms |
| If silent | Reasonable time |
| Business day | Working day after receipt |
| Delivery | Prompt upon acceptance |
Prohibited Practices
Commingling
| Definition | Mixing escrow with personal funds |
|---|---|
| Prohibited | Always |
| Exception | Minimal amount for fees |
| Amount | Typically $100-$500 |
Conversion
| Definition | Using escrow for personal use |
|---|---|
| Prohibited | Always |
| Criminal | May be prosecuted |
| Discipline | License revocation |
Disbursement
When to Disburse
| Situation | Action |
|---|---|
| Closing | Per closing statement |
| Contract termination | Per agreement |
| Dispute | Hold until resolved |
Disputed Funds
| Action | Details |
|---|---|
| Hold funds | Until dispute resolved |
| Interpleader | File with court |
| Notify parties | Written notice |
| Do not release | Without authorization |
Record Keeping
| Requirement | Details |
|---|---|
| Ledger | For each transaction |
| Bank statements | Monthly reconciliation |
| Retention | 5 years minimum |
| Audit | IDFPR can audit |
IDFPR Oversight
| Authority | Details |
|---|---|
| Audit | At any time |
| Inspection | Without notice |
| Records access | Must provide |
| Violations | Discipline |
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Test Your Knowledge
What is commingling in real estate escrow?
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D
Test Your Knowledge
If there is a dispute over earnest money between buyer and seller, what should the Managing Broker do?
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D