New Hampshire Revised Statutes 331-A:13 – Escrow Accounts of Broker; Interest; Audit
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I. The principal broker shall maintain an escrow account or accounts, separate and apart from the individual or office account, in which all deposits on fully executed contracts shall be promptly deposited. The escrow account or accounts shall be maintained in an insured financial institution within the state of New Hampshire.
II. The principal broker may place the deposit in an interest-bearing escrow or trust account or instrument. The interest earned shall accrue to the party making the deposit as a sum to be used toward the purchase price unless otherwise agreed in writing.
III. No checks shall be drawn against uncollected contract deposits in the escrow account.
IV. Withdrawal of contract deposits shall be allowed to be forwarded to the closing agent, title company, or attorney, prior to performance of a contract for the purpose of performance. Otherwise, none of the contract deposits shall be withdrawn until the contract has been terminated by performance, by contemporaneous agreement in writing between all parties, or by order of a court of competent jurisdiction, except as provided by paragraph VI of this section.
V. On licensure, the principal broker shall sign a permit giving the commission permission to audit the escrow account or accounts.
VI. If a principal broker retains a contract deposit for a period exceeding 90 days from the contract closing date, without securing performance, a written agreement, or a court order as required in paragraph IV of this section, the principal broker may release the contract deposit to one or more parties to the contract by initiating a release process. The release process requires the principal broker to notify all parties by certified mail that the deposit will be distributed to the parties specified in the letter if the parties fail to perform, enter into a written mutual release, or initiate litigation within 60 days of the mailing date of the certified letter. If neither buyer nor seller initiates litigation or enters into a written release within 60 days of the mailing date of the certified letter, the principal broker may release the deposit without penalty under this section. The principal broker’s release of this deposit under this paragraph releases the principal broker solely from liability under this chapter, as opposed to civil liability.
VII. A principal broker may deposit business or personal funds into an escrow account to cover service charges only, assessed to the account by the bank or depository where the account is located, or to maintain a minimum balance in the account as required by the regulations of the bank or depository.
VIII. If a principal broker licensed under this chapter holds funds entrusted to him or her pursuant to a written agreement for the sale or lease of real property and the written agreement expressly authorizes the principal broker, or firm, as escrow agent, to continue to hold the funds in the event of a dispute between the buyer or tenant and seller or landlord concerning entitlement to the funds, no claim shall be maintained against the principal broker, or firm, as escrow agent, whether as trustee, stakeholder, or otherwise, if the escrow agent has complied with the mutual written instructions of the buyer or tenant and seller or landlord, if any, and any order or judgment of a court or final decision of an arbitrator with regard to accounting for or disbursing the funds. In an action commenced with regard to entitlement to such escrowed funds, a party to the action may file a motion seeking an order to have the funds paid into court by the escrow agent. Written notice of the motion shall be given by the moving party to all other parties and to the escrow agent. The escrow agent shall pay the funds into court within 10 days of receipt of the order on the motion or within such other time as provided by the court.
II. The principal broker may place the deposit in an interest-bearing escrow or trust account or instrument. The interest earned shall accrue to the party making the deposit as a sum to be used toward the purchase price unless otherwise agreed in writing.
Terms Used In New Hampshire Revised Statutes 331-A:13
- Contract: A legal written agreement that becomes binding when signed.
- Entitlement: A Federal program or provision of law that requires payments to any person or unit of government that meets the eligibility criteria established by law. Entitlements constitute a binding obligation on the part of the Federal Government, and eligible recipients have legal recourse if the obligation is not fulfilled. Social Security and veterans' compensation and pensions are examples of entitlement programs.
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- state: when applied to different parts of the United States, may extend to and include the District of Columbia and the several territories, so called; and the words "United States" shall include said district and territories. See New Hampshire Revised Statutes 21:4
- Trust account: A general term that covers all types of accounts in a trust department, such as estates, guardianships, and agencies. Source: OCC
- Trustee: A person or institution holding and administering property in trust.
III. No checks shall be drawn against uncollected contract deposits in the escrow account.
IV. Withdrawal of contract deposits shall be allowed to be forwarded to the closing agent, title company, or attorney, prior to performance of a contract for the purpose of performance. Otherwise, none of the contract deposits shall be withdrawn until the contract has been terminated by performance, by contemporaneous agreement in writing between all parties, or by order of a court of competent jurisdiction, except as provided by paragraph VI of this section.
V. On licensure, the principal broker shall sign a permit giving the commission permission to audit the escrow account or accounts.
VI. If a principal broker retains a contract deposit for a period exceeding 90 days from the contract closing date, without securing performance, a written agreement, or a court order as required in paragraph IV of this section, the principal broker may release the contract deposit to one or more parties to the contract by initiating a release process. The release process requires the principal broker to notify all parties by certified mail that the deposit will be distributed to the parties specified in the letter if the parties fail to perform, enter into a written mutual release, or initiate litigation within 60 days of the mailing date of the certified letter. If neither buyer nor seller initiates litigation or enters into a written release within 60 days of the mailing date of the certified letter, the principal broker may release the deposit without penalty under this section. The principal broker’s release of this deposit under this paragraph releases the principal broker solely from liability under this chapter, as opposed to civil liability.
VII. A principal broker may deposit business or personal funds into an escrow account to cover service charges only, assessed to the account by the bank or depository where the account is located, or to maintain a minimum balance in the account as required by the regulations of the bank or depository.
VIII. If a principal broker licensed under this chapter holds funds entrusted to him or her pursuant to a written agreement for the sale or lease of real property and the written agreement expressly authorizes the principal broker, or firm, as escrow agent, to continue to hold the funds in the event of a dispute between the buyer or tenant and seller or landlord concerning entitlement to the funds, no claim shall be maintained against the principal broker, or firm, as escrow agent, whether as trustee, stakeholder, or otherwise, if the escrow agent has complied with the mutual written instructions of the buyer or tenant and seller or landlord, if any, and any order or judgment of a court or final decision of an arbitrator with regard to accounting for or disbursing the funds. In an action commenced with regard to entitlement to such escrowed funds, a party to the action may file a motion seeking an order to have the funds paid into court by the escrow agent. Written notice of the motion shall be given by the moving party to all other parties and to the escrow agent. The escrow agent shall pay the funds into court within 10 days of receipt of the order on the motion or within such other time as provided by the court.