§ 35.324. Deadline for depositing money into escrow account +7Pennsylvania · Real Estate · English

Brokers must deposit funds by the end of the next business day, with an exception allowing checks to be held with written permission pending offer acceptance.

• ✓Money belonging to another must be deposited by end of the next business day after receipt where escrow records are maintained
• ✓With written permission of both buyer and seller (or lessee and lessor), a check may be held pending acceptance and then deposited within 1 business day of acceptance

A broker must deposit money belonging to another into escrow by the end of the next business day following its receipt in the office where escrow records are maintained. With written permission of both buyer and seller (or lessee and lessor), the broker may refrain from depositing a check pending acceptance of the offer, but must deposit within 1 business day of acceptance.

• ✓Money must be deposited into escrow by the end of the next business day following its receipt
• ✓With written permission of both parties, a check may be held pending offer acceptance, then deposited within 1 business day of acceptance

Escrow accounts must meet specific requirements: insured institution, broker as trustee, withdrawals without prior notice, and exclusive escrow use. Interest handling and record release rules also apply.

• ✓An escrow account must be in a Federally-/State-insured institution, designate the broker as trustee, allow withdrawal without prior notice, and be used exclusively for escrow
• ✓A sole proprietor or broker of record may authorize employees in writing to deposit and licensed employees to withdraw for proper charges
• ✓If money is expected to be held over 6 months, an interest-bearing account is encouraged; interest is held/disbursed pro rata like principal unless agreed otherwise
• ✓A broker may not claim escrow interest unless a lessor under section 511.2 of the Landlord and Tenant Act
• ✓Must provide the Commission a letter authorizing release of account records upon request or office inspection

Brokers may not commingle or misappropriate escrow funds or interest, with a narrow exception for covering bank service charges or maintaining minimum balances.

• ✓A broker may not commingle escrow money or interest with business, personal, or other funds
• ✓A broker may deposit business/personal funds only to cover bank service charges or maintain a required minimum balance
• ✓A broker may not misappropriate escrow money or interest for business, personal, or other purposes

When parties dispute entitlement to escrowed money, the broker must retain the funds until resolution and may petition the court to interplead after notice.

• ✓The broker must retain disputed money in escrow until the dispute is resolved
• ✓If resolution appears remote without legal action, the broker may petition the county court to interplead rival claimants after 30 days' notice to the parties

Brokers must keep detailed escrow records and produce them for Commission examination, including party names and key dates for each transaction.

• ✓Records must show the names of the party from whom money was received, to whom it belongs, and for whose account it is deposited
• ✓Records must show the dates the money was received, deposited into, and withdrawn from the escrow account
• ✓Records must be produced for Commission examination upon written request or under office inspection per § 35.246

A broker's escrow duty may not be waived or altered by agreement between the parties, between the broker and parties, or between brokers. Where a deposit was never entrusted to the agent and the buyer knowingly pays directly to the builder, there is no duty to escrow those funds (Ramalingam).

• ✓A broker's escrow duty may not be waived or altered by any agreement
• ✓No escrow duty arises for funds never entrusted to the agent when the buyer knowingly pays a deposit directly to the builder

If a sales deposit is tendered by the buyer to the listing broker, the listing broker assumes the escrow duty. If tendered to the selling broker with prior buyer notice of delivery to the listing broker, the listing broker assumes escrow (with written buyer acknowledgment of specified information). Without such prior notice, the selling broker assumes the escrow duty.

• ✓A deposit tendered to the listing broker means the listing broker assumes the escrow duty
• ✓With prior written notice to the buyer, a deposit given to the selling broker can be handled by the listing broker as escrow holder
• ✓Without prior notice to the buyer, the selling broker assumes the escrow duty

An escrow account must be maintained in a Federally- or State-insured bank/depository, designate the broker as trustee, provide for withdrawal without prior notice, and be used exclusively for escrow purposes. Money expected to be held over 6 months is encouraged to be interest-bearing; interest is held/disbursed pro rata like principal, and the broker may not claim it unless the broker is a lessor under the Landlord and Tenant Act.

• ✓An escrow account must be insured, designate the broker as trustee, allow withdrawal without prior notice, and be used exclusively for escrow
• ✓Interest on escrow must be disbursed pro rata like principal; the broker may not claim it unless a lessor under section 511.2 of the Landlord and Tenant Act
• ✓A broker must provide the Commission an authorization letter to release escrow records on request or inspection

A broker may not commingle escrow money or escrow interest with business, personal or other funds, except to deposit business/personal funds to cover bank service charges or maintain a required minimum balance. A broker may not misappropriate escrow money or interest for business, personal or other purposes.

• ✓A broker may not commingle escrow funds/interest with business, personal or other funds
• ✓Business/personal funds may be deposited only to cover bank service charges or maintain a required minimum balance
• ✓A broker may not misappropriate escrow money or interest for any purpose

If a dispute arises over entitlement to escrow money, the broker must retain the money in escrow until resolved. If resolution appears remote without legal action, the broker may, following 30 days' notice to the parties, petition the county court to interplead the rival claimants.

• ✓A broker must retain disputed escrow money until the dispute is resolved
• ✓After 30 days' notice, the broker may petition the county court to interplead the rival claimants

A broker must keep escrow records and produce them for the Commission upon written request or office inspection. Records must contain the name of the party from whom money was received, the party to whom it belongs, the party for whose account it is deposited, and the dates money was received, deposited, and withdrawn.

• ✓Escrow records must identify the party who paid, the owner, and the account party
• ✓Records must show the dates money was received, deposited into, and withdrawn from the escrow account