Section 17-2702. ESCROW FUND

 

2702.1This section applies to any real estate transaction in which any person is entrusted, receives, accepts, or otherwise holds or deposits monies or other trust instruments, of whatever kind or nature, pending the consummation or termination of the transaction involved, whether or not the person requires licensure under this chapter. For the purposes of this section, the person receiving the monies or trust instruments shall be referred to as the escrow holder or trustee.

 

2702.2In the absence of written instructions to the contrary signed by all parties to a real estate transaction, monies or other trust instruments received by a person for deposit pending the consummation or termination of the transaction shall, within seven calendar (7) days, be deposited in a financial institution located within the District whose deposits are insured either by the Federal Deposit Insurance Corporation or the Savings Association Insurance Fund, or their successors.

 

2702.3The escrow holder or trustee shall maintain the escrow account as a separate account for monies belonging to others.

 

2702.4Each escrow holder or trustee shall notify the Board within fourteen (14) calendar days of the name and post office address of the financial institution in which any escrow or trustee account has been established on a form provided by the Board.

 

2702.5The form shall include the following:

 

(a)Name of escrow account;

 

(b)Account number;

 

(c)Financial institution where account is located;

 

(d)Address of institution;

 

(e)Licensee's name, address, telephone number, and license number; and

 

(f)Written authorization from the escrow holder or trustee allowing the Board to examine all documents held by the financial institution related to the escrow or trust accounts listed on the form.

 

2702.6Monies or other trust instruments shall be maintained in the account until the transaction involved is consummated or terminated, or until proper written instructions have been received by the escrow holder or trustee directing the withdrawal and disposition of the monies, at which time, all the monies shall be promptly and fully accounted for by the escrow holder or trustee.

 

2702.7The escrow holder or trustee shall not commingle any of the monies held in an escrow or trustee account with his or her own funds or use any of the escrow or trust monies for any purpose other than the purpose for which the monies were entrusted to him or her. However, the escrow holder or trustee may keep a nominal amount of his or her personal funds in an escrow or trustee account for the purpose of keeping the escrow or trustee account active.

 

2702.8An escrow holder or trustee shall not be entitled to any part of the earnest money or other money paid to, or held by, the escrow holder or trustee in connection with any real estate or business transaction as a part or all of his or her commission or fee or for any other purpose until the transaction has been consummated or terminated.

 

2702.9Monies held in a escrow or trust account for 90 days or more shall earn interest beginning on the 91st day until the day that the transaction is consummated or terminated.

 

2702.10Interest owed under § 2702.9 of this chapter shall be earned at the highest of the following rates:

 

(a)The legal maximum rate under federal law for interest on ordinary savings deposits in commercial banks;

 

(b)The rate on the account in which the escrow is deposited; or

 

(c)The rate on the certificate of deposit or other security given as the escrow or trust.

 

2702.11A service fee of no more than fifteen dollars ($15.00) may be subtracted from the interest by the financial institution into which the escrow or trust funds are deposited.

 

2702.12In the event of any direct conflict between this section and the Security Deposit Act, effective February 20, 1976 (D.C. Law 1-48; 22 DCR 2825), the Security Deposit Act and any rules or regulations issued under the authority of the Security Deposit Act shall prevail.

 

source

Final Rulemaking published at 52 DCR 6998 (July 29, 2005).