Fiduciary Duties Of Escrow Holders In Washington State
Posted: Nov 5, 2018
By: Washington State Estate Planning & Probate Lawyer William O. Kessler
An escrow holder owes fiduciary duties to all parties to the escrow, and owes the same duty of fidelity that an agent or trustee owes to its principles. Parties to escrows frequently misunderstand these duties. It is not an escrow holder’s job to sort out ambiguities of a contract between the parties; rather, the escrow holder’s duties are defined by the actual escrow instructions given by the parties. An escrow holder also cannot prefer one party over the other, or disclose one party’s confidences to the other without consent. Escrow holders are not to be arbiters of disputes between parties, and when disagreements arise, escrow must ordinarily leave the parties to sort it out themselves. Disputes over earnest money deposits, for example, often result in the escrow holder continuing to hold the funds until the dispute is resolved, or in the case of litigation, the escrow holder may have to deposit the funds with the court to allow disbursement to whoever ultimately prevails in the lawsuit. While escrow holders have no general duty to investigate fraud, they do owe duties to disclose fraud which is discovered or reasonably suspected. If you have a dispute arising out of an escrow transaction, real estate attorneys at Beresford Booth with experience in escrow matters can help. Examples of those matters include earnest money deposits, breach of purchase contracts, escrow negligence, and real estate fraud.
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