Why escrow exists
Ownership of a property is not acquired by signing the contract but by registration in the Land Registry (cadastre). The cadastral office may make the entry no earlier than after a 20-day protective period has passed. If the buyer paid the seller right after signing, the buyer would carry the risk for that whole time. If, on the other hand, the buyer waited to pay until after registration, the seller would carry it.
Escrow solves this: the money is held by a third party whom both sides trust, and it is paid out only once the transfer is complete.
How escrow works
- The buyer, the seller and the attorney sign an escrow agreement. It sets out exactly under what conditions the money is released.
- The buyer deposits the purchase price into the attorney's escrow account. If the purchase is financed with a mortgage, the bank sends its share of the money there.
- An application for entry into the Land Registry is filed.
- Once the buyer is registered as the new owner, the attorney pays the money out to the seller. If the transfer falls through, the money is returned to the buyer.
Attorney or notary
Attorney escrow and notarial escrow work in much the same way, and both are safe. What matters more is experience — how quickly the escrow holder can deal with the buyer's bank and how flexibly they respond to the terms of the particular deal.
How we help
We provide complete legal services and all the contractual documentation for a sale or purchase, including attorney or notarial escrow of the purchase price. We work with vetted attorneys and notaries across the regions, and we handle communication with the cadastral office and the filing of the application for entry on your behalf.
