Earnest money · CA, FLEarnest money dispute: who gets the deposit when the deal fails
The contract decides who is entitled to the earnest money; the escrow holder releases it only with both parties' signatures or a decision. States add pressure against bad-faith refusals. California: if escrow does not close by the contract date, buyer and seller must make sure the deposit goes to whoever is entitled; a party who will not sign the release within 30 days of a written demand owes the deposit plus treble damages of at least $100 and at most $1,000 and attorney fees – unless the money is held for a good-faith dispute (Civ. Code §1057.3). Florida: a broker holding a disputed deposit must promptly notify the Real Estate Commission and use an escape procedure – an escrow disbursement order, arbitration, court, or mediation finished within 90 days; when a buyer in good faith fails to meet the financing clause, the broker may return the deposit without those steps (Fla. Stat. §475.25(1)(d)1).
What the statutes say
California – duty
Buyer and seller must see that escrow funds go to whoever is entitled if escrow doesn't close on time (§1057.3(a)).
California – 30-day demand
Refusing to sign the release within 30 days of a written demand: the deposit, treble damages ($100–$1,000) and attorney fees (§1057.3(b)).
California – good faith
No liability if the funds are held to resolve a good-faith dispute; the claimant must prove there was none (§1057.3(c)).
California – not a cancellation
Signing the escrow release does not cancel the contract unless it says so (§1057.3(e)).
Florida – broker escrow
Conflicting demands: notify the Commission promptly and use an escape procedure – disbursement order, arbitration, court or mediation within 90 days (§475.25(1)(d)1).
Florida – financing failure
Buyer who in good faith fails the financing clause: broker may return the deposit without those procedures.
Steps when the deposit is stuck
- Read the contract's termination and default paragraphs – they decide entitlement.
- Send a written demand to the other party and the escrow holder, and keep proof of delivery.
- In California, count 30 days from the written demand.
- If a Florida broker holds the deposit, ask which escape procedure it is using.
What the TC keeps
- The termination notice and the date it was delivered.
- The written demand for the deposit and the escrow holder's release form.
- Every deadline in the contract that the termination relied on.
Questions buyers and sellers ask
Who gets the earnest money if the deal falls through?
Whoever the contract entitles – for example a buyer who terminated within a contingency. The escrow holder needs both signatures or a decision to release it.
What if the seller refuses to release my earnest money in California?
Send a written demand; after 30 days a party refusing without a good-faith dispute owes the deposit, treble damages of $100–$1,000 and attorney fees (Civ. Code §1057.3).
How are earnest money disputes resolved in Florida?
The broker holding the deposit notifies the Real Estate Commission and uses an escrow disbursement order, arbitration, court or mediation (§475.25(1)(d)1).
Related guides
Record termination notices and deposit demands as dated tasks and documents on the deal in ClosingCode, so the 30-day clock and contract deadlines are visible.
Start free trialSources: California Civil Code §1057.3 (leginfo.legislature.ca.gov); Florida Statutes §475.25 (flsenate.gov, 2025) – read October 25, 2026.
General information, not legal advice. ClosingCode is software; it is not a law firm or brokerage.