Appendix E: Escrow’s Duties

These are the typical duties of the escrow holder in a transaction: 

• Collecting and disbursing closing funds according to escrow instructions.
• Distributing final transaction documents to all parties.
• Drafting escrow instructions according to the terms and conditions of the purchase agreement.
• Filing and recording all necessary documents with the appropriate authorities.
• Filing UCC-1 Financing Statement with the secretary of state when seller financing is involved.
• Holding earnest money in a safe, secure escrow account pending the closing.
• Ensuring that secured creditors are satisfied and coordinating any necessary payoffs.
• Notifying and obtaining clearances from county, state, and federal agencies as required.
• Notifying the county tax collector.
• Obtaining a copy of all real estate leases and coordinating and confirming the lease assignments with the landlord.
• Obtaining a corporate status report of all entities involved in the transaction from the secretary of state, and confirming that the entities exist and are in good standing.
• Obtaining written evidence of the proper authority for an entity to sign the purchase agreement and related documents to consummate the transaction.
• Overseeing UCC-3 terminations, amendments, and releases of liens. 
• Performing a UCC-1 lien and business personal property tax search on the business to ensure a clear title can be conveyed.
• Preparing estimated closing statements prior to the closing of escrow.
• Preparing fictitious business name statements.
• Preparing final closing statements for the parties and accounting for the disposition of all funds deposited in escrow.
• Preparing separate buyer’s and seller’s settlement statements reflecting that all funds are being handled through escrow.
• Prorating and paying the rent, deposits, taxes, and other expenses required out of the sales proceeds.
• Prorating taxes, interest, rents, and security deposits, among others, as instructed.
• Requesting demands from existing lienholders and receiving claims.
• Requesting publication, recording, and UCC lien searches for state and county.
• Securing releases of all contingencies or other conditions imposed on the particular escrow.
• Securing tax clearances.