Using Escrow accounts is becoming increasingly popular across a number of sectors. Traditionally, and still widely used for M&A transactions where funds are retained post sale to cover warranties and claims, we are now seeing Escrow becoming more mainstream to help manage risk and provide security. One such area is Property – be it construction, residential or commercial sales and litigation.
With real estate values continuing to climb and UK property sales at an all time high, it is unsurprising that more clients require our Escrow services.
The Escrow Agreement will outline the conditions agreed upon by both the seller and buyer of the property, for example any maintenance of the property to be fulfilled by the seller before exchange, or after completion. Once these conditions have been agreed, the buyer will deposit the funds into the escrow account to be held against completion of the remedial work. Upon the completion of the conditions outlined in the Escrow Agreement, the escrow service provider will then release the funds to the seller of the property.
This process gives the seller peace of mind when carrying out any agreed works, allowing the seller to know that funds for the purchase will be available upon completion.
It also allows the buyer to be confident that the seller is committed to the transaction and is making the necessary steps to complete the sale of the property in accordance with the agreed upon terms.
Protecting funds has become of paramount importance, and we have seen some funders in the construction industry making Escrow accounts for client deposits mandatory.
How we can help with Escrow Arrangements
Our ability to open Escrow accounts within hours, subject to satisfactory due diligence, coupled with the fact we are regulated by the Financial Conduct Authority as an Authorised Payment Institution through our finance partners MangoPay make us an ideal choice for Escrow services.
We have straightforward Escrow Agreements available but we can also create bespoke Agreements tailored to your specific requirements.
We have no minimum value and can support a variety of transaction types from short term to indefinite arrangements, from those with minimal activity all the way through to heavily transactional arrangements.
If you would like to find out more about how Escrow may suit your needs in relation to a property transaction or development project, and how best to protect funds, please contact below: