Escrow Agreement - Real Property

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Escrow Agreement - Real Property Powered By Docstoc
					An escrow agreement is an arrangement whereby an independent and trusted third
party is used to receive and hold something of value until a certain condition has been
fulfilled or when performance of an obligation has occurred. This document sets forth
an agreement between a purchaser and vendor whereby physical possession of the real
property is transferred to the purchaser prior to the closing date; however the purchase
money and deed to the property are placed in escrow and will not be transferred until
the closing pursuant to the underlying Purchase and Sale Agreement. This escrow
agreement contains both standard escrow terms and customizable features.
             ESCROW AGREEMENT – REAL PROPERTY

RE:           Interim Occupancy of __________________________ [Instruction: Insert
              address of real property.] (the “Property”)
              By ______________[Instruction: Insert Purchaser name.] (the “Purchaser’)
              from ____________ [Instruction: Insert Seller name.](the “Vendor”)
              Pursuant to a Purchase and Sale Agreement dated __________ [Instruction:
              Insert Purchase and Sale Agreement date.]
              (the “Purchase Transaction”)



       IN CONSIDERATION of the mutual benefits arising out of this Agreement, the Vendor
and the Purchaser hereby agree to close the subject Purchase Transaction in escrow on the
following basis:




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1.     The date and time of closing are hereby extended to _______[Instruction: Insert closing
       time.] o’clock in the p.m., on the ______ day of ____________, 2_____ [Instruction:
       Insert date, month and year of closing] (the “Extending Closing Time”). Despite this
       extension all adjustments shall be made as of the date hereof. [Comment: In the
       alternative, previous sentence can be changed to have adjustments as of the date of
       closing. Parties should review original Purchase and Sale Agreement provisions to
       see if same was previously agreed upon and insert same; otherwise a determination
       should be made between the parties and entered here.]

2.     Subject to this Agreement, the Vendor hereby permits the Purchaser to take immediate
       possession of the Property and the Purchaser indemnifies the Vendor from all demands,
       claims, causes of action, loss and damages arising from the Purchaser’s possession,
       subject to the Vendor’s insurance obligations. [Comment: Parties should consider
       whether or not possession is subject to the payment of additional moneys by Purchaser, and
       also whether or not any such moneys shall be credited toward the purchase price.]
       Purchaser shall use the Property as a personal residence only and shall abide by all the laws,
       homeowners’ association rules, if any, and governmental regulations with respect to the use of the
       Property. Purchaser acknowledges that s/he is taking possession of the Property in “as is”
       condition, subject only to any other matters that may be set forth in the Purchase and Sale
       Agreement. [Comment: Parties should also note which party shall pay applicable Homeowner’s
       Association or similar fees, if any, during time of pre-closing possession.]



3.     The Purchaser’s attorney shall hold all documents delivered to him/her in escrow until
       the escrow has been released. The Vendor’s attorney shall hold all moneys paid and/or
       documents delivered to him/her in escrow until the escrow has been released. Any
       documents delivered or monies previously paid pursuant to the Purchase and Sale
       Contract shall be subject to the escrow provisions contained therein. With respect to any
       documents delivered or moneys paid hereunder, in the even either party gives written to
       either Purchaser’s attorney or Vendor’s attorney, as the case may be (when referred to
       herein, either such party may be called “Escrowee”, and same shall refer to either or both,
       as the case may be), demanding payment of the moneys held or documents delivered
       hereunder, such Escrowee shall give prompt notice to the other party of such demand.
       For purposes of this paragraph, notice shall mean that notice set forth in the Purchase and
       Sale Agreement, and if no such notice provision shall be set forth therein, same shall
       mean notice in writing and either (a) sent by either of the parties hereto or by their
       respective attorneys who are hereby authorized to do so on their behalf or by the
       Escrowee, by registered or certified mail, postage prepaid, or (b) delivered in person or
       by overnight courier, with receipt acknowledged, to the respective addresses given in this
       contract for the party and the Escrowee, to whom the notice is to be given, or to such
       other address as such party or Escrowee shall hereafter designate by notice given to the
       other party or parties and the Escrowee pursuant to this paragraph. Each notice mailed
       shall be deemed given on the third business day following the date of mailing the same,
       except that any notice to Escrowee shall be deemed given only upon receipt by Escrowee
       and each notice delivered in person or by overnight courier shall be deemed given when
       delivered,



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        If Escrowee does not receive notice of objection from such other party to the proposed
        payment of moneys or delivery of documents within 10 business days after the giving of
        such notice, Escrowee is hereby authorized and directed to make such payment or deliver
        such document If Escrowee does receive such notice of objection within such 10 day
        period or if for any other reason Escrowee in good faith shall elect not to make such
        payment, Escrowee shall continue to hold such amount until otherwise directed by notice
        from the parties to this contract or a final, non-appealable judgment, order or decree of a
        court. However, Escrowee shall have the right at any time to deposit such moneys and the
        interest thereon, if any, or such documents with the clerk of a court in the county in
        which the Premises are located and shall give notice of such deposit to Vendor and
        Purchaser. Upon such deposit or other disbursement in accordance with the terms of this
        paragraph, Escrowee shall be relieved and discharged of all further obligations and
        responsibilities                                                                hereunder.

        The parties acknowledge that Escrowee is acting solely as a stakeholder at their request
        and for their convenience and that Escrowee shall not be liable to either party for any act
        or omission on its part unless taken or suffered in bad faith or in willful disregard of this
        contract or involving gross negligence on the part of Escrowee. Seller and Purchaser
        jointly and severally (with right of contribution) agree to defend (by attorneys selected by
        Escrowee), indemnify and hold Escrowee harmless from and against of all costs, claims
        and expenses (including reasonable attorneys' fees) incurred in connection with the
        performance of Escrowee's duties hereunder, except with respect to actions or omissions
        taken or suffered by Escrowee in bad faith or in willful disregard of this contract or
        involving       gross       negligence        on      the       part      of      Escrowee.

        Escrowee may act or refrain from acting in respect of any matter referred to herein in full
        reliance upon and with the advice of counsel which may be selected by it (including any
        member of its firm) and shall be fully protected in so acting or refraining from action
        upon            the            advice             of            such              counsel.

        Vendor’s attorney and Purchaser’s attorney acknowledges receipt of the moneys and
        documents noted hereunder and Escrowee's agreement to the provisions of this paragraph
        by signing in the place indicated on the signature page of this contract.

        Escrowee or any member of its firm shall be permitted to act as counsel for the party it
        represents hereunder in any dispute between the parties whether or not Escrowee is in
        possession of the moneys or documents noted herein and continues to act as Escrowee.

4.      The Vendor agrees to place and maintain insurance and pay all sums duly levied therefor
        on the Property until the Extended Closing Time and the risk of loss shall remain in all
        respects with the Vendor in accordance with the provisions of the Agreement of Purchase
        and Sale. The Vendor shall provide Purchaser with proof of such valid and existing
        insurance upon written request for same. Vendor, and Vendor’s agents shall have the
        right, at all reasonable times, and upon reasonable prior notice (except that, in the case of
        an emergency, no notice shall be required, and entrance shall be permitted at all times), in
        case of emergency, for the purpose of inspecting, performing necessary repairs and


                                              _______________
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        maintenance and alterations or to supply agreed upon materials and services.

5.      Purchaser shall immediately place gas, electric, sewer, water, cable and internet services
        in Purchaser’s name upon occupancy, and pay all the bills for same as they come due.
        Purchaser shall not make any improvements, modifications or alterations, whether
        structural, cosmetic or decorative to the Property until after the Extended Closing Time.
        Purchaser shall not change any locks, security codes or similar any other security devices
        on any doors, windows or other methods of ingress and egress.


6.      Prior to the Extending Closing Time the Purchaser shall not assign, sublet, part with
        possession or encumber the Property and the Purchaser shall maintain the Property as
        would a prudent owner.

7.      If the interim closing is not effected by the Extended Closing Time, then, unless they
        make another written agreement in that regard, the Vendor and the Purchaser forthwith
        shall each return to the other party all documents and moneys received from the other and
        the Purchaser forthwith shall give up possession of the Property and leave it in the
        condition in which it was on taking possession. For this purpose, the Purchaser
        acknowledges that a tenancy is not created within the meaning of the Landlord and
        Tenant Act pursuant to the laws of the applicable jurisdiction.


8.      Time shall be of the essence of this Agreement and shall remain of the essence of the
        Agreement of Purchase and Sale. [Comment: Parties should consult original
        Purchase and Sale Agreement regarding any applicable time of the essence
        provisions and modify previous sentence accordingly, as necessary.] Except as
        amended herein, all terms and conditions of the Agreement of Purchase and Sale shall
        remain in full force and effect.

9.      The Purchaser hereby acknowledges that the Vendor has satisfactorily demonstrated that
        he, she or they, as the case may be, is or are ready, willing and able to complete this
        transaction.

10.     The Purchaser’s attorney is hereby authorized to release the keys from escrow to the
        Purchaser.




                                              _______________
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The covenants, obligations and conditions herein contained shall be binding on and inure to the
benefit of the heirs, legal representatives, and assigns of the parties hereto.
DATED at _____________, this _______ day of ___________, 2______. [Instruction: Insert
execution date.]

                                          the Purchaser, by his/her/its attorney,
                                          Without personal liability attached to such attorney

                                          (PURCHASER’S ATTORNEY)
                                          Per:




                                          the Vendor, by his/her/its attorney,
                                          Without personal liability attached to such attorney

                                          (VENDOR’S ATTORNEY)
                                          Per:




                                              _______________
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DOCUMENT INFO
Description: An escrow agreement is an arrangement whereby an independent and trusted third party is used to receive and hold something of value until a certain condition has been fulfilled or when performance of an obligation has occurred. This document sets forth an agreement between a purchaser and vendor whereby physical possession of the real property is transferred to the purchaser prior to the closing date; however the purchase money and deed to the property are placed in escrow and will not be transferred until the closing pursuant to the underlying Purchase and Sale Agreement. This escrow agreement contains both standard escrow terms and customizable features.
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