ESCROW REQUIREMENTS


§ 35.321. Duty to deposit money belonging to another into escrow account.

 (a)  Except as provided in subsection (b), a broker shall deposit money that the broker receives belonging to another into an escrow account in a Federally or State-insured bank or depository to be held pending consummation of the transaction or a prior termination thereof that does not involve a dispute between the parties to the transaction, at which time the broker shall pay over the full amount to the party entitled to receive it. If a broker is a partnership, association or corporation, its broker of record shall be responsible for ensuring that the escrow duty is performed.

 (b)  A broker is not required to hold in escrow rents that he receives as a property manager for a lessor. A broker shall deposit rents received into a rental management account that is separate from the broker’s escrow and general business accounts.

 (c)  If a broker receives money belonging to another under an installment land purchase agreement, the transaction shall be considered consummated, for purposes of subsection (a), when the buyer has been afforded the opportunity, by means of the seller’s written acknowledgement on or affixed to the agreement, to record the agreement, unless the agreement specifies otherwise.

 (d)  If a broker receives money belonging to another under an agreement of sale involving cemetary property, the transaction shall be considered consummated, for purposes of subsection (a), when the buyer receives a copy of the agreement of sale.

 (e)  If a broker receives a security deposit belonging to another under a lease agreement, the broker’s duty to pay over the deposit for purposes of subsection (a), shall arise when the tenancy ends. If a sale of the leased premises or a change in a property management contract occurs during the term of the tenancy, the broker may transfer the security deposit from the broker’s escrow account to the escrow account of the lessor or the lessor’s broker upon notification in writing to each tenant from whom the broker received a deposit of the name and address of the banking institution in which the deposits will be held, and the amount of the deposits.

Authority

   The provisions of this §  35.321 issued under the Real Estate Licensing and Registration Act (63 P. S. § §  455.101—455.902); amended under sections 404 and 602 of the Real Estate Licensing Registration Act (63 P. S. § §  455.404 and 455.602).

Source

   The provisions of this §  35.321 adopted February 24, 1989, effective February 25, 1989, 19 Pa.B. 781; amended November 17, 2000, effective November 18, 2000, 30 Pa.B. 5954. Immediately preceding text appears at serial pages (201871) to (201872).



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