QUICK NOTE: ESCROW AGENT OWES FIDUCIARY DUTY TO PARTIES TO ESCROW AGREEMENT

Many types of deals involve the use of an escrow agent.  Whether it is a real estate transaction, settlement, or another type of deal, an escrow agent holds money (or something else of value) in trust for a third party(ies) based on the parameters of the escrow agreement.  An escrow agent is a fiduciary and, as such, owes a fiduciary duty to the parties to the escrow agreement.   The duties the escrow agent owes to the parties would be governed by the escrow agreement.  An escrow agent does not owe a fiduciary duty to parties that are not part of the escrow agreement.   Keep this in mind when entering into a transaction that requires the use of an escrow agent, particularly if you have a stake in the money or property of value.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

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