Share
Share
Share
Share
Share
Share

My Favorite pages

 

What's this?remove

 
  • Sign in to use the “My Favorites” feature.
 

Connect with us on:

Dream Big!

Escrow fights: A need-to-know about interpleader actions

 

May 15, 2017 – A real estate broker, title company, attorney or other escrow holder holds a buyer's deposit in escrow for a real estate transaction, and those transactions sometimes fail. And in some of those cases, the two parties disagree, forcing the escrow holder to deal with conflicting demands for the deposit and an inability to determine whether both parties agree on the way the deposit should be released.

In these escrow dispute cases, the escrow holder might choose to file an "interpleader action" in civil court. If the court allows the interpleader action, it enables the escrow holder to deposit the escrowed property with the court and be dismissed from the lawsuit.

An interpleader action forces the seller and buyer into court, and the court decides who is entitled to the deposit money.

The disadvantage of an interpleader action? The escrow holder incurs attorneys' fees and costs. However, the escrow holder's attorney usually requests that the court allow fees and costs to be paid from the escrowed funds, and the court often does so.

It's important to remember that the total dollar amount of the deposit available to the parties could be reduced if the court grants this request for reimbursement of costs – sometimes significantly.

Both the Florida Realtors/Florida Bar contract forms and the Florida Realtors CRSP contract form contain provisions that address the escrow agent's rights when interpleading escrowed money or property.

© 2017 Florida Realtors

 

Related Topics: Florida Realtors Legal News