Escrow disputes are not uncommon in real estate transactions. The most common escrow dispute occurs when both the buyer and the seller disagree over the money deposit on a failed deal. In this case, the escrow account (often held by a third-party escrow agent) may be frozen until both parties address their disagreements.
Below is a highlight of the most common escrow disputes in Jacksonville, Florida:
So, what should you do if you are in an escrow dispute?
Florida Statutes, section 475.25(1) (d) 1 provides specific procedures that real estate professionals must follow should an escrow dispute arise. All disputes are controlled by the contract signed by the seller, buyer, and escrow agent. Sometimes, the real estate contract will have contingencies that allow the buyer to get out of the contract in specific circumstances.
But if a disagreement occurs, the escrow agent may not be able to refund the money. In other instances, both parties will be required to enter into mediation to address the dispute. Some contracts may have provisions that require the escrow company to hire a lawyer to file an interpleader case in the Circuit Court in Jacksonville and deposit the money with the court. Then the court will decide who takes the money.
If you are dealing with an escrow dispute in Jacksonville, FL, we are ready to assist you at Atlantic Coast Title and Escrow.
In the event of a dispute, your title company will not be able to resolve the dispute unilaterally, meaning that the company will not be able to release money to you or the other party until a resolution between the two parties is reached. In Florida, a title company must follow instructions contained in the contract or obtain written consent from both parties agreeing to who will receive the escrow money when released.
As mentioned above, parties could elect to mediate the dispute or enter into arbitration. However, it is usually in the best interest of both parties to resolve the dispute as soon as possible. An escrow dispute, for example, does not prevent the seller from pursuing other buyers.
Of course, the best way to avoid escrow disagreements is to prevent them before they start. Real estate professionals can do this by drafting a solid contract that clearly outlines each party’s rights, roles, and responsibilities, as well as steps to follow, should a dispute arise. The contract should also indicate the procedure to follow if there is no resolution to the escrow disagreement.
A real estate contract can also have a list of contingencies that must be met in order for a deal to go through. If contingencies are not met, then the earnest money deposited by the buyer must be returned. Contingencies can include a home inspection, the ability to secure financing, or the sale of the buyer's home.
Contingencies create clear expectations about what must be done in order for the sale of a home or commercial property to go through. As long as both the buyer and the seller uphold their responsibilities throughout the transaction, then disputes are unlikely to arise.
A skilled escrow and title attorney can review your contract and advise you on the best options regarding escrow disagreement procedures.
Do you want to buy or sell property in Jacksonville? Or do you have a few questions regarding escrow disputes? The Jacksonville Escrow Attorneys at Atlantic Coast Title and Escrow can help. Contact us online or call us at (904) 853-5591 to discuss your case confidentially and offer you the assistance you need.