The ESCROW account is a special bank account, opened on the name of the Buyer, with the purpose of depositing, keeping or blocking the funds (the amount of ESCROW) for the payment of goods or services, until the successful completion of real estate transactions, services or delivery of goods. The ESCROW amount will be released only upon fulfillment of the conditions of the ESCROW Contract.
The ESCROW contract is a tripartite agreement concluded between the Bank, the Buyer and the Seller stipulating the conditions of use of the ESCROW Amount. The right to manage the ESCROW account rests exclusively with the Bank, in strict accordance with the terms of the ESCROW Agreement.
How does the Escrow account work?
The seller wants to sell, and the buyer wants to buy a real estate (apartment, house, etc.). At the request of customers, the Bank opens an ESCROW account on the name of the Buyer and signs a tripartite agreement (ESCROW Agreement) in which it indicates all the conditions related to the transaction.
The Buyer deposits in the Escrow account, the amount of money negotiated with the Seller and indicated in the ESCROW Agreement (real estate price). Once the money is deposited, the account is blocked by the Bank, which can be released under the following conditions:
- To the Seller - only upon presentation of the document confirming the registration of the real estate and the property right on the name of the Buyer, by the OTC.
- To the buyer - only if the transaction has not been completed, for certain reasons.