Most buyers and sellers of real estate know the basics of escrow. A third party holds onto the money for a purchase as well as the title to the property. It establishes a commitment between the two parties to a property deal. However, there are many areas where an escrow holding can go wrong. Here’s how a qualified real estate attorney can help you out of this messy situation.
When a Minor Fumble Can Cost Millions
A California Appeals Court decision from August 2015 shows some of the issues involved with the escrow process. In Tribeca LLC vs. First American Title, the two parties had a special setup prior to closing a deal. First, a deposit of $1 million would go into escrow when there was a deal pending the review of the second party (a part of Tribeca). Upon approval, that money became nonrefundable and the remaining balance would be due.
The chain of events began with the wiring of the million dollars that escrow officials mistakenly put under the name of Tribeca. After a verbal approval of the deal, that million became nonrefundable in the eyes of the contract. However, it turns out that the assigning of the money was erroneous and without a written contract it could not be claimed by the second party.
Escrow Guarantees Rights
In the case where a million dollars is at stake in a real estate deal, you need a specialist in California real estate law to make sure it ends up where it belongs: back in your accounts. Escrow is neutral holding ground for funds, making it illegal to move the money to an account where there is not express consent on the part of the depositor.
A complicated commercial deal like the one referenced above is not the only time when disputes arrive over funds in escrow. Similar issues can come up after the sale of a residential property when there is a problem with the house. The contract you agree to will determine what happens after moving in (or moving out) of the property.
Whenever you enter into a purchase or sale contract, make sure you have the best real estate attorney in Beverly Hills on your side. Contact Lavaee Law Group before you make your next deal, we are here to help you win! For further information or to schedule an appointment please contact us at 310.331.8484 or visit www.LavaeeGroup.com.