This text of Indiana § 5-16-5.5-3 (Retainage; escrow agreement) is published on Counsel Stack Legal Research, covering Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Any state agency which enters into a contract
for any public building, work or improvement, and any contractor
subcontracting portions of such contract, which contracts contain
provision for retainage shall include in their respective contracts a
provision that at the time any retainage is withheld, the state agency
and/or contractor shall place such retainage in an escrow account, with
a bank, savings and loan institution, or the State of Indiana or an
instrumentality thereof, as escrow agent selected by mutual agreement
between the affected contract parties, pursuant to a written agreement
among the bank or savings and loan institution, the state agency, and
the contractor as appropriate. The escrow agreement shall provide as
follows:
(a)The escrow agent shall promptly invest all escrow
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Any state agency which enters into a contract
for any public building, work or improvement, and any contractor
subcontracting portions of such contract, which contracts contain
provision for retainage shall include in their respective contracts a
provision that at the time any retainage is withheld, the state agency
and/or contractor shall place such retainage in an escrow account, with
a bank, savings and loan institution, or the State of Indiana or an
instrumentality thereof, as escrow agent selected by mutual agreement
between the affected contract parties, pursuant to a written agreement
among the bank or savings and loan institution, the state agency, and
the contractor as appropriate. The escrow agreement shall provide as
follows:
(a) The escrow agent shall promptly invest all escrowed principal in
such obligations as shall be selected by the escrow agent in its
discretion.
(b) The escrow agent shall hold the escrowed principal and income
until receipt of notice from the state agency and the contractor, or the
contractor and the subcontractor, specifying the portion or portions of
the escrowed principal to be released from the escrow and the person
or persons to whom such portion or portions are to be released. Upon
receipt of such notice the escrow agent shall promptly remit the
designated portion of escrowed principal and the same proportion of
then escrowed income to such person or persons.
(c) The escrow agent shall be compensated for its services as the
parties may agree on a commercially reasonable fee commensurate
with fees then being charged for the handling of escrow accounts of
like size and duration. The fee must be paid from the escrowed income
of the escrow account.
(d) The agreement may include such other terms and conditions not
inconsistent with the foregoing paragraphs (a), (b) and (c) including but
not limited to provisions authorizing the escrow agent to commingle
the escrowed funds with funds held pursuant to other escrow
agreements and limiting the liability of the escrow agent.
Formerly: Acts 1972, P.L.44, SEC.1. As amended by Acts 1977,
P.L.60, SEC.2.