Escrow Agreement

What is an Escrow Agreement?

Occasionally a circumstance arises where two parties with different concerns or goals want a disinterested third party to hold money or collateral until a certain time has passed, or until a debt has been discharged, or until one of the parties completes a promised action. The document which identifies the parties, explains the circumstances, and authorizes a disinterested party (the stakeholder) to hold something while the parties wait on the event which will cause a termination of the escrow is called an escrow agreement.
 

When do I need an Escrow Agreement?

The most common escrow agreements are located in earnest money contracts, or in a separate agreement attached to earnest money contracts, authorizing the payment of the buyer’s earnest money to a disinterested title company pending the closing of the sale and purchase of property.  The earnest money will be held in escrow until the sale and purchase is completed, or until the parties agree to release the earnest money if the sale and purchase falls through.

Occasionally portions of the sale proceeds are retained by the title company under an escrow agreement executed by the seller and buyer and the title company until the seller completes some promise to the buyer.  For example, completion of promised repairs.

I assist clients in drafting, reviewing, interpreting, modifying, and negotiating escrow agreements.