Handling of Escrow Services
The escrow service plays an important role in the handling of real estate contracts. An escrow agreement is concluded for the assumption of the escrow service, in which the rights and obligations of the trustee are precisely regulated. The trustee manages the agreed purchase price in accordance with the modalities stipulated in the escrow agreement between the parties. This procedure ensures maximum security for the contracting parties, even in the event of a reversal of the legal transaction.
The assumption of the escrow service must be reported immediately by the commissioned attorneys to the Bar Association, thereby ensuring the proper handling of the entrusted money.
- Liability of the Bar Association
- Mandatory for purchase prices over 40k
Assumption of the Escrow Service
The escrow agreement is concluded in writing between all parties.
The attorney is obligated to establish a separate account “according to the terms and conditions for trust accounts of attorneys.” The trustee may only make dispositions from this account in accordance with the account disposition order signed by all parties. The trustee is obligated to immediately notify the grantors of all account movements.
Advantages of the Escrow Service
The escrow service primarily serves to protect the buyer and seller. The seller knows that the purchase price has been deposited with the trustee and that the payment of the purchase price is secured. The buyer has the security that the purchase price payment will only be made when the obligations stipulated in the escrow agreement, such as the registration of the buyer in the land register, have been fulfilled.
