What is Escrow?

What is Escrow?

Escrow is the term used when a contractual arrangement between two or more parties is put in place, in which an Escrow Company will hold funds or property during a transaction, acting as an independent third party.

When providing Escrow Services the Escrow Company acts as a third party to the transaction by holding the funds or property until pre-agreed conditions have been met. Once the conditions are met the Escrow Service provider will release the funds/ property held. 

Escrow Services can be used in almost any situation where money or property is being transferred between parties. 

Take a look at Our Svervices to find out more.

What is it used for?

Escrow can be used in relation to virtually any matter involving the transfer of money or property.

Examples include:

• Corporate financing and the raising of capital
• Corporate transactions including mergers, acquisitions and sales
• Charity and fundraising events
• Loans where release of the loan money is conditional on a future event or is to be paid in instalments
• Real estate and other property related transactions
• Sales of high value property at a distance (eg cars, antiques and wine)
• The holding of settlement funds following disputes

Please see our escrow services, for the types of service and sectors we work with.

What are the benefits of using Escrow?

Escrow Services are commonly used to provide certainty to all parties involved in a transaction regarding flow of funds. 

When using an Escrow Service, both parties will agree on set conditions that must be met before the Escrow Service provider releases any funds held in the Escrow Account. 

1

A buyer and seller make an agreement

Agree terms

Party A and Party B agree to terms - Riverside Escrow will draft an escrow agreement tailored to the clients needs. This agreement will contain specific release of funds conditions.

2

The buyer pays Riverside Escrow

Payment to escrow

Party A - submits a payment by approved payment method to our Escrow Account, Riverside Escrow verifies the payment and notifies the parties that funds have been deposited.

3

The seller sends the goods to the buyer

Contract performed

Party B provides the goods or services to party A.

4

The buyer accepts goods as per agreement

Contract complete

Party A receives the goods or services and proof of contract and completing is provided.

The process

1. Agree Terms

Party A is buying a Boat, Party B is the Seller. Party A and Party B agree to use Riverside Escrow as an independent third party to hold the funds for the purchase. Once the KYC/ AML checks have been completed, Riverside Escrow will draft an Escrow Agreement. 

The Escrow Agreement is tailored to the client’s needs, and contains conditions that must be met before the release of funds. These conditions are agreed by both Party A and Party B.  The condition for this purchase is the delivery of the boat in good condition and in 6 months of the Escrow Agreement being dated. 

2. Payment to Escrow

Once the Escrow Agreement has been signed by both parties. Party A will then be asked to pay the Escrow amount into our escrow bank account. Riverside Escrow will then verify the payment and notify both parties that the funds have been received into the escrow account.  This is often referred to as putting money in escrow. 

3. Contract performed

Party B will arrange transport of the boat. As per the Escrow Agreement, Party B will provide proof that the Boat has been collected by the transport company. 

4. Contract Complete

Party A receives the Boat in the expected condition and it has arrived before the 6 month cut-off date. Party A notifies Riverside Escrow of this, providing the documents detailed in the Escrow Agreement.   

5. Funds Released

Once Riverside Escrow has confirmed that all the relevant conditions have been met, as set out in the Escrow Agreement, we will then release the money in escrow, paying out the money held in the escrow bank account to Party B, as set out in the Escrow Agreement.