Escrow agreements can get complicated quickly. In this article, we are going to discuss 5 details to keep in mind when dealing with escrow.
Identify All Involved Parties
It is essential that the escrow agreement clearly define all parties involved. In particular, it is important to note who benefits from the agreement and who is responsible for resolving matters outlined in the agreement.
Define an Appropriate Resolution
The escrow agreement should specifically state the requirements of all parties and what needs to happen in order to satisfy the agreement.
Outline an Alternative Resolution
Should the requirements of the escrow agreement not be met, there should be language in the agreement that outlines the next steps.
Determine How to Disburse Remaining Funds
If there are any excess funds remaining in the escrow account once the terms of the agreement have been satisfied, there should be an understanding of how to disburse these remaining funds.
Set a Termination Date
Escrow agreements should not go on indefinitely. The agreement should have a clearly defined termination date. There should also be information as to what action to take if the escrow obligations have not been met when the termination date is reached.
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