California Code of Regulations
Title 10 - Investment
Chapter 3 - Commissioner of Financial Protection and Innovation
Subchapter 9 - Escrow Agents
Article 4 - Books, Records and Accounts
Section 1738.5 - Escrow Instructions
Current through Register 2024 Notice Reg. No. 38, September 20, 2024
The following shall be contained on the face or first page of the escrow instructions, or attached as a separate amendment to the escrow instructions, but only in the case where the escrow agent proposes to act accordingly to the following, enumerated instructions:
(1) An authorization or direction to disburse any money except to an authorized subescrow agent prior to recordation of instruments in escrows relating to real property or prior to consummation of sale in escrows relating to bulk sales of personal property; or
(2) An authorization or direction to deliver, except to a duly authorized subescrow agent, or record instruments affecting ownership or interest in real or personal property, prior to deposit with the escrow agent or an authorized subescrow agent of the full sum of money required to be deposited in escrow under escrow instructions.
(3) An instruction authorizing disbursements in payment of services, or other items of expense, not including, however, commissions payable to brokers or agents.
(4) An instruction in not less than 8 point bold type stating:
"The principals to the transaction agree that if no additional instructions are received from one or both of the principals to the transaction within 120 days from the date escrow is to close, the escrow holder shall consider the escrow canceled and is authorized to take a cancellation fee in the amount specified in the instruction and disburse any remaining deposits to the parties specified in the instruction."
In order for the instruction to be valid, it must be initialed or electronically executed by the principals to the transaction. The principals to the transaction are the buyer and seller or the borrower and lender.
1. New
section filed 3-3-52 effective thirtieth day thereafter (Register 27, No.
5).
2. Amendment of subsection (a) filed 7-8-83; effective thirtieth
day thereafter (Register 83, No. 28).
3. Editorial correction of
printing error in subsection (a)(2) (Register 96, No. 52).
4.
Repealer and new subsection (a), new subsections (a)(3)-(4), and repealer of
subsections (b)-(b)(2) filed 12-16-97; operative 1-15-98 (Register 97, No.
51).
5. Amendment of section heading, last paragraph and NOTE filed
7-21-2003; operative 7-21-2003 pursuant to Government Code section
11343.4
(Register 2003, No. 30).
Note: Authority cited: Section 17400, Financial Code. Reference: Section 17403.3, Financial Code.
