I have heard businessmen, even lawyers, discuss putting money into escrow without knowing exactly what is entailed. This valuable method of delaying the completion of a transaction for purposes of timing and meeting of conditions is often entered into without due care. As a result those who have been bitten will tell you that it is easier to put money into escrow than to get it out! For the basic meaning of the thing we need not consult anything more esoteric than our friend Webster:
“A deed, bond or other written engagement, delivered to a third person, to be delivered by him to the grantee only upon the performance or fulfillment of some condition. The deposit of the escrow places it beyond the control of the grantor; but no title passes until the fulfillment of the condition.”
Notice that line about the bond passing beyond the control of the grantor. That’s you, if you put it up. In other words you can’t get it back! Or can you? Well, you can, if conditions are not fulfilled and if you have previously written into the agreement that the deposit shall be returned to you by such and such a date.
Just remember that one small thing. It might mean thousands of dollars to you someday. That is because, lacking such a clear mandate, the escrow agent, usually a bank, has no legal direction about what to do with the money!
Now, as to that “fulfillment of condition” – boy: One of the big banks that specialize in such work asks for the following in escrows it agrees to handle: provision for architect’s written approval where a construction is to be finished; provision that the Agent (bank) will not be required to release the money on receipt of any legal paper but only on a designated attorney’s received opinion that the legal paper received is actually the one described in the escrow agreement; provision that the bank should not be required to pass on the money because of any event (death, birth, marriage, etc.) but only upon receipt of the attorney’s opinion that this was the event required; provision that the agreement does not in any way reflect the bank’s own approval of the whole transaction!
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