§ 778-A — Contracts requiring down payments in escrow

§ 778-a. Contracts requiring down payments in escrow. 1. An escrow\nagent who undertakes to hold a buyer's down payment in the purchase and\nsale of a home shall have the fiduciary obligation to segregate and\nsafeguard the buyer's down payment in a special bank account, and shall\nnot commingle such down payment with the escrow agent's personal or\nbusiness funds.\n 2. A contract which requires that a down payment be held in escrow\nshall identify the escrow agent and the bank in which the down payment\nshall be deposited during the term of the escrow.\n 3. An escrow agent shall not be required to maintain a down payment in\na bank account which is separate from all other bank accounts, provided\nthe escrow agent's books of account and banking records shall accurately\nshow the allocation to each owner of all funds that are deposited in the\nescrow agent's special bank account and all transactions relating to the\nreceipt and disbursement of escrow funds.\n 4. Unless the contract provides otherwise, an escrow agent shall not\nbe required to deposit the down payment in an interest-bearing bank\naccount. If the escrow agent is an attorney admitted to practice in this\nstate, a bank account authorized by section four hundred ninety-seven of\nthe judiciary law shall be a lawful depository for down payments held by\nthe attorney in escrow.\n 5. The provisions of this section may be modified by a written\nagreement signed by the buyer, seller and escrow agent.\n 6. The provisions of this section are not exclusive and do not relieve\na buyer, seller or escrow agent from compliance with all other\napplicable provisions of law, or from civil or criminal liability\nimposed by other applicable provisions of law.\n