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Escrow agreements are essential documents in every significant real estate transaction. They are mechanisms for allocating risk among the parties to the transaction.
Escrow agents are charged with determining whether certain contractual conditions are satisfied, thereby triggering the disbursement of money or property.
Escrow arrangements mitigate the risk of non-performance by one of the parties. But escrow agreements are fraught with potential conflicts and traps that may give rise to delays in finally closing a transaction.
This program provides a practical guide to drafting effective escrow agreements, risk allocation, conflict avoidance and working with escrow agents.
- Essential terms – property held, conditions for release/disbursement, fees
- Defining an agent's duties, authority, and liability
- Practical problems with escrow arrangements – holding all the documents, breaking escrow, death of party
- Issues in construction contracts, development transactions, and property sales
- Letter of credit, tax and bankruptcy issues to consider