Also known as: escrows · escrowed · escrowing · escrowee · escrowl · escrow agent
Written by attorneys · grounded in primary & secondary sources — see below
A conditional delivery of property or a document to a third party who holds it until a stated condition occurs, at which point the third party releases it to the intended recipient. The arrangement creates immediate conditional rights in the recipient while preventing the depositor from unilaterally revoking the transfer. An escrow agent owes duties of honesty and fidelity to the parties and is not an agent of either until the condition is satisfied.
Enzo Eastwood leased an apartment from Evergreen Bank. After proper notice that the roof leaked, Enzo placed his monthly rent into an escrow account with a neutral bank. The bank held the funds until Evergreen completed the repairs, at which point the money was released to the landlord.
Edgar Evers sought a development permit from the water district. The district demanded an impact fee that Evers challenged as an unconstitutional exaction. The parties placed the disputed sum into escrow while the litigation proceeded, preserving the funds until the court determined whether the fee could be imposed.
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Investors delivered checks to a brokerage firm president who claimed the funds would be placed in escrow accounts earning high returns. The president converted the money immediately. The absence of any genuine escrow arrangement allowed the investors to recover from the firm for the misappropriation.
Eduardo Enriquez negotiated a will contest settlement. The parties executed releases and placed them in escrow pending court approval. Before approval, counsel discovered a perpetuities problem and sought to modify the releases while they remained in the escrow holder's possession.
Evelyn Ellison sold ranch property through a title company. The parties signed written escrow instructions directing the company to deliver the deed containing a repurchase option only upon payment of the purchase price. The instructions governed the conditional delivery and prevented the grantors from revoking the deed once deposited.
Ethan Evans faced an eviction action under a state forcible entry statute. The court ordered him to pay accruing rent into an escrow account maintained by the clerk while the constitutional challenge to the statute proceeded. The funds remained protected until the litigation concluded.
Legal title remains with the grantor until the condition is satisfied. Upon satisfaction the doctrine of relation back treats title as passing on the date the deed was deposited with the escrow agent.
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A tenant entitled to withhold rent may place it in escrow after proper notice to the landlord. Only the abated amount is escrowed, and the funds are released once the default is cured or the lease ends.
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An escrow holder is not an agent of either party until the terminating event occurs. The holder owes duties of honesty and fidelity to both sides and must follow the escrow instructions.
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The corporation may place the shares in escrow or restrict their transfer. If the services are not performed the escrowed shares and credited distributions may be cancelled in whole or in part.
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…by Leston B. Nay, president of the firm and owner of 92% of its stock. Nay induced the respondents to invest funds in "escrow" accounts that he represented would yield a high rate of return. Respondents did so from 1942 through 1966, with the majority of the transactions occurring in the 1950's. In fact, there…