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Current through October 23, 2012
(a) A title insurer may operate as an escrow, indemnity, settlement, or closing agent, if:
(1) All funds deposited with the title insurer in connection with any escrow, settlement, closing, or indemnity deposit shall be submitted for collection to or deposited in a fiduciary trust account in a qualified financial institution no later than the close of the next business day in accordance with the following requirements:
(A) The funds shall be the property of the person entitled to them under the provisions of the escrow, settlement, indemnity deposit, or closing agreement and shall be segregated for each depository by escrow, settlement, indemnity deposit, or closing in the records of the title insurer in a manner that permits the funds to be identified on an individual basis; and
(B) The funds shall be applied only in accordance with the terms of the individual instructions or agreements under which the funds were accepted.
(b) Funds held in an escrow account shall be disbursed only pursuant to a written instruction or agreement specifying how and to whom the funds may be disbursed.
(c) Funds held in an indemnity deposit account shall be disbursed only pursuant to a written agreement specifying:
(1) What actions the indemnitor shall take to satisfy his or her obligation under the agreement;
(2) The duties of the title insurer with respect to disposition of the funds held, including a requirement to maintain evidence of the disposition of the title exception before any balance may be paid over to the depositing party or his or her designee; and
(3) Any other provisions the Commissioner may require.
(d) Any interest received on funds deposited in connection with any escrow, settlement, indemnity deposit, or closing shall be paid, net of administrative costs, to the depositing party, unless the depositor's instructions for the funds or a governing law provides otherwise.
(e) Disbursements may be made out of an escrow, settlement, or closing account only if deposits in amounts at least equal to the disbursement have first been made directly relating to the transaction disbursed against and if the deposits are in one of the following forms:
(1) Cash;
(2) Wire transfers such that the funds are unconditionally received by the title insurer or the insurer's depository;
(3) Checks, drafts, negotiable orders of withdrawal, money orders, and any other item that has been finally paid before any disbursements; provided, that a title insurer may accept a check in an amount not to exceed $3,000 that has not been finally paid before any disbursements;
(4) A depository check, including a certified check, governed by the provisions of the Expedited Funds Availability Act, approved August 10, 1987 (101 Stat. 635; 12 U.S.C. § 4001 et seq.); or
(5) Credit transfers through the Automated Clearing House which have been deemed available by the depository institution receiving the credits transfers and conform to the operating rules set forth by the National Automated Clearing House Association.
(f) This chapter shall not:
(1) Prohibit the recording of documents prior to the time funds are available for disbursement with respect to a transaction; provided, that all parties consent to the transaction in writing; or
(2) Amend, alter, or supersede other sections of this chapter, or the laws of the District of Columbia or the United States, regarding an escrow holder's duties and obligations.
(g) The Commissioner may prescribe a standard agreement for escrow, settlement, closing, or indemnity deposit funds.
(Sept. 24, 2010, D.C. Law 18-223, § 2155, 57 DCR 6242.)
HISTORICAL AND STATUTORY NOTES
Emergency Act Amendments
For temporary (90 day) addition, see § 2155 of Fiscal Year 2011 Budget Support Emergency Act of 2010 (D.C. Act 18-463, July 2, 2010, 57 DCR 6542).
Legislative History of Laws
For Law 18-223, see notes following § 31-5031.01.
