What is the function of escrow? When do you typically use an escrow?
The function of escrow is essentially to have a neutral place where the parties to a purchase and sale agreement deposit documents, money, and other miscellaneous items. This is done through a third party who only delivers the items to the other party to the transaction upon the occurrence of certain conditions.
In California, the typical function of escrow involves the property buyer’s deposit of the purchase money in exchange for the seller’s deposit of the deed for title to the property. Usually the delivery of these items are concurrent conditions of escrow. The idea here being that neither party is compelled to perform until they have assurance that the other party is concurrently performing.
The escrow holder is typically the agent of both parties upon their submission of instructions, documents, and funds to the escrow. Accordingly, escrow agents are governed by the ordinary principles of agency. The agency created is, however, limited to the obligation of the escrow holder to carry out the instructions of each of the parties to the escrow. Typically these instructions are consistent. When they become inconsistent the escrow holder has no ability to act.
At Schorr Law, our Los Angeles based real estate attorneys have extensive experience dealing with escrow both in smooth purchase and sale transactions, as well as when times get rough and the parties submit conflicting escrow instructions (like cancellation instructions) to the escrow holder. These situations typically arise when there is a dispute concerning the purchase and sale agreement.
To schedule a consultation, or to get advice regarding your escrow procedures, contact us today at (310) 954-1877. You can also send us an email to email@example.com. Feel like texting? Send us a text to (323) 487-7533. You can also just go to our Contact Us page and send us a message through there.