I had an interesting situation last week where an escrow was demanding signed originals before they would disperse funds. In 9 years in the business, I have never come across a situation where escrow would not accept a faxed copy of an amendment as if it was an original. You may not see this as a problem, but let me assure you that when snail mail gets lost and or is slow over the holidays, and escrow is in some remote location 2 hours away, this can make a difference. Especially when tens of thousands of dollars are being held up. After much wrangling, I was able to effect a reasonable outcome. But it still irked me that the process was so difficult. So I set out to do some research and here is what I found.
Searching the Internet, I found several references by the department of corporations that escrow was in fact allowed to keep electronic records. If this was the case, It seemed to me that they should have been able to accept a fax. Furthermore, the department of real estate and many court documents are allowed to be faxed and are deemed as originals. Yet I couldn’t find the exact regulation that this unnamed escrow agent was referring to. And as usual, second best just won’t do. So I got on the phone to the department of corporations escrow desk to get my questions answered. Here is what they said.
They said that if escrow drafts their supplemental instructions for both parties to accept fax as originals, then it will be allowed. However, If they put in their escrow instructions that only originals will be accepted, then that is required. So the bottom line according to the State of California is that there is no official regulation or law pertaining to how escrow will handle facsimiled documents. The escrow itself is to determine that along with the participating parties. So after all of that drama, it comes back to escrow having the power to get agreement to make life easy.
The moral of the story is: When you pick an escrow company, make sure that they have reasonably accommodative instructions. And in my experience, if they don’t utilize email then dump them. This is 2007. Its time to get with it! Electronic communication is way too important to do without. For a referral to the best escrow companies in your area contact me at: http://www.jdanielrealty.com/contact.php
