(a) Every licensee under this chapter shall have the responsibility of a trustee for all moneys, other consideration, or instruments received by it. No licensee shall mingle any such moneys or other property with its own moneys or other property, or with moneys or other property held by it in any other capacity. All moneys held by a licensee in escrow as herein defined shall be deposited in financial institutions, payable on demand. Under this chapter, deposits in financial institutions are limited to sweep accounts as described in this section, checking accounts, money market deposit accounts, and savings accounts with no specified maturity date. Deposits at financial institutions may be held in sweep accounts, provided that:

Terms Used In Hawaii Revised Statutes 449-16

  • Escrow: Money given to a third party to be held for payment until certain conditions are met.
  • Escrow: means any transaction affecting the title to real property, including leaseholds, proprietary leaseholds, and condominiums, in which a person not a party to the transaction and neither having nor acquiring any interest in the title receives from one party to the transaction, holds until the happening of an event or performance of a condition and then delivers to another party to the transaction, any money or other consideration or any instrument affecting the title to that real property, all in accordance with the terms of the agreement between the parties to the transaction. See Hawaii Revised Statutes 449-1
  • Escrow account: means any escrow depository account with a financial institution to which cash or items are deposited with respect to any escrow. See Hawaii Revised Statutes 449-1
  • Financial institution: means any bank, savings and loan association, financial services loan company, or credit union doing business in the State whose accounts are insured by the Federal Deposit Insurance Corporation, the National Credit Union Share Insurance Fund or other similar or successor program of federal insurance. See Hawaii Revised Statutes 449-1
  • Item: means any check (including a cashier's or certified check), negotiable order of withdrawal, draft, traveler's check, or money order. See Hawaii Revised Statutes 449-1
  • Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
  • Trustee: A person or institution holding and administering property in trust.
(1) The licensee using the sweep account shall have a net worth of not less than $1,000,000;
(2) The sweep account is a deposit account administered by a financial institution in which the moneys over a minimum balance are periodically transferred into a money market mutual fund account invested only in obligations of:

(A) The United States government;
(B) Agencies backed by the full faith and credit of the United States government; or
(C) Agencies originally established or chartered by the United States government to serve public purposes; and

periodically recredited to the sweep account; and

(3) The licensee is liable for all moneys transferred to the money market mutual fund account under the sweep account, including any loss of value.
(b) No licensee shall disburse funds from an escrow account until cash and or items sufficient to fund any disbursements from the account have been received and deposited to the account, and with respect to such items the licensee complies with the provisions of either paragraphs (1) or (2) hereof.

(1) Where an item has been received and submitted for collection, no licensee shall disburse funds from an escrow account with respect to the item until final settlement of the item has been received by the financial institution to which the item has been submitted for collection.
(2) No licensee shall disburse funds from the escrow account with respect to an item drawn on a financial institution until the licensee confirms that sufficient collected funds are on deposit in the drawer’s account.
(c) A licensee may deliver any money, consideration, or instrument affecting the title to real property prior to funds becoming available for disbursement under subsection (b) if it has received the written consent of the parties to the transaction.

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