Citations Affected: IC 32-29-1-12.
Synopsis: Expenditure from escrow. Prohibits an escrow or closing
agent from making a disbursement from an escrow account on behalf
of another person unless certain funds have been received to complete
Effective: July 1, 2005.
January 13, 2005, read first time and referred to Committee on Judiciary.
A BILL FOR AN ACT to amend the Indiana Code concerning
account with a federally insured:
(2) savings and loan association;
(3) credit union; or
(4) savings bank;
that is used exclusively for the deposit of funds transferred electronically or otherwise, cash, money orders, or negotiable instruments that are received by the agent to effect an escrow transaction.
(e) As used in this section, "escrow transaction" means a transaction in which a person, for the purpose of effecting and closing the sale, purchase, exchange, transfer, encumbrance, or lease of an interest in residential real property to another person, provides a written instrument or document, money, negotiable instrument, check, evidence of title to real property, or any other thing of value to an agent to be held by the agent until:
(1) a specified event occurs; or
(2) the performance of a prescribed condition;
when it is to be delivered to a specified person by the agent in compliance with applicable instruction. Delivery can be completed either by filing a written instrument or document in the public record or by direct tender to the appropriate person.
(f) As used in this section, "negotiable instrument" has the meaning set forth in IC 26-1-3.1-104(a).
(g) As used in this section, "residential real property" means any real property improved or to be improved with a dwelling to house one (1) to four (4) families.
(h) An agent may not knowingly make a disbursement from an escrow account on behalf of another person unless the following conditions are met:
(1) The cash, funds, money orders, checks, or negotiable instruments necessary for the disbursement have been:
(A) transferred electronically to or deposited into the escrow account of the agent and are available for withdrawal and disbursement; or
(B) physically received by the agent before disbursement and are intended for deposit not later than the next banking day after the date of disbursement.
(2) The transfers or deposits described in subdivision (1) may be any of the following:
(A) Cash or electronically transferred funds.
(B) Certified checks, cashier's checks, official checks, or
money orders that are drawn on an existing account at a
federally insured bank, savings and loan association, credit
union, or savings bank.
(C) A check issued by the United States or the state of Indiana, or by an agency, instrumentality, or political subdivision of the United States or the state of Indiana.
(D) A check drawn on the escrow account of a title insurance company or title insurance agency, if the agent has reasonable and prudent cause to believe that sufficient funds are available for withdrawal in the account on which the check is drawn at the time of disbursement.
(E) A personal check in a amount not to exceed one thousand dollars ($1,000).
(i) An agent is not prohibited from advancing an amount not to exceed one thousand dollars ($1,000) from an escrow account on behalf of a party to an escrow transaction for the purpose of paying incidental fees, including conveyance and recording fees. Incidental fees may be paid in order to:
(1) effect and close the sale of;
(5) encumber; or
residential real property that is the subject of the escrow transaction.