My broker just discovered that the escrow officer never collected the buyers deposit due three (3) after the opening of escrow. 40 days late...

Question

My broker just discovered that the escrow officer never collected the buyers deposit due three (3) after the opening of escrow. 40 days later, and when we are due to close, the buyer has vanished and the escrow officer admits she never received the deposit. What recourse to I have?. Can the escrow officer be held liable for the deposit amount?

Answer

No. The escrow officer is not responsible for policing the terms of your agreement. The escrow officer's job is to RECEIVE whatever is deposited into escrow, and then when all the terms of the ESCROW INSTRUCTIONS, not your contract, have been met for the escrow to close, to then distribute the contents of the escrow as instructed. You'll have better luck looking to your broker, for not following up with the escrow to find out if that had been done and making a demand. Also the lack of a deposit does not mean the buyer is not liable to you if you fall out of escrow and subsequently have to sell for a lower price or incur more expense before you close at the same price.

Answer

I agree with Mr. McCormick. The escrow officer has a duty to act as a third party neutral and comply with the terms of the escrow instructions that you signed with the buyer. The escrow officer does not have a duty to enforce or make one party comply. The escrow officer must receive funds and account for them, but not chase people down and collect them.

Answer

Your broker is trying to shift responsibility to the escrow holder. The escrow holder's duty is to HOLD stuff delivered to it, like money, documents, etc., not to go out and tell the parties "Hey, your deposit is overdue!"