TERRI’S NOTES
Important Reminder about Escrow Deposits on Leases
It is very important to keep in mind when dealing with escrow deposits that TIME IS OF THE ESSENCE. A day late may be too late!
If an Escrow Deposit is not received on time, pursuant to the contract, (same for sales and for leases) and the Realtor fails to notify the Seller/Landlord/Listing Agent in writing that such deposit was not received, the Escrow Agent may become liable and may be obligated to pay the full amount of said deposit to the Seller/Landlord. This money will be paid by the Realtor and is not covered under Fortune’s E&O Policy/Legal Fund.
Please note that the Contract to Lease Form – Clause 2, Deposit states the following:
It reads “Tenant has paid $———-“. When that space is filled out with a dollar amount, without clarifying any further, the Realtor is representing that the deposit money has already been received.
Therefore, I urge all Realtors that unless they are holding the money or a wire has been received, to leave that space blank or put $0.00. The name of the Escrow agent may be filled out.
Under Clause 5, there is a space to enter the different deposits amount and the due dates. Take the time to be very specific.
The more precise and clear this form is filled out , the least likely to bring you trouble.
TERRI ALVAREZ
Broker Associate
Managing Director
FORTUNE INTERNATIONAL REALTY