An escrow is a neutral place where the parties to a purchase and sale agreement and deposit documents, money and other miscellaneous items with a third party who only delivers them to the other party to the transaction upon the occurrence of certain conditions.
In California, the typical escrow involves the 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 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 inquire about a free consultation, contact us today at (310) 954-1877, or firstname.lastname@example.org.