Depositing money in escrow – lawyer's escrow services
What is the purpose of the money escrow service?
The lawyer's escrow service is intended to increase the confidence and trust that contract parties shall duly do what has already been agreed upon. The lawyer's escrow service for money or important documents is also used by our clients in situations where they need to protect their money for a variety of reasons (theft, another person, for the case of death), although they are not a party to a specific contractual relationship. The lawyer's escrow service is governed by the resolution of the Board of the Czech Bar Association (www.cak.cz).
The lawyer or law office (escrower) acts as an independent third party that takes money or other valuables into custody, which are the subject of a certain contractual relationship – such as purchase or sale of real estate – until the time of the fulfilment of the agreement. Thus the escrow allows planning your transaction without any fear if you are not sure that the counterparty properly fulfils the contract.
Money or valuables put in the lawyer's escrow will only be paid upon the fulfilment of the respective consideration. If the obligation of the counterparty is not fulfilled, the money is returned by the lawyer to the party that deposited it into the escrow. This procedure therefore increases the confidence and trust of the parties in the contractual relationship.
What are the advantages of the lawyer's escrow service?
Compared with similar notarial or bank services, the lawyer’s escrow service is more advantageous for our clients in terms of costs. The whole process of arranging the escrow is also less formal (a contract can even be concluded remotely), and the escrow can even easily be carried out in relation to non-standard agreements between the parties. Other reasons for using our lawyer's escrow services include:
- Prepared detailed written escrow agreement;
- Special dedicated bank accounts and safekeeping in bank vaults;
- Insurance of the lawyer;
- We provide services in Slovak, English, German and Russian;
- Lower costs in comparison with the notarial escrow service.
The lawyer's escrow service is mainly used for depositing money or documents in connection with:
- Sale, purchase or donation of real estate;
- Settlement of marital property;
- Settlement of shares in common ownership;
- As part of business relationships;
- Escrow of important family or business documents, securities;
- Protection of money against another person;
- Protection of money against theft;
- Protection of money for the case of death;
- Protection of money for other reasons.
Overview of services offered by GRUBNER & PARTNERS:
- Escrow of money in connection with the sale and purchase of real estate;
- Escrow of money in connection with the settlement of marital property;
- Escrow of money in connection with the settlement of joint ownership of shares;
- Escrow of money for their protection against another person;
- Escrow of money in the case of death;
- Escrow of money to protect them against theft;
- Escrow of money for other reasons;
- Escrow of money in connection with business relationships;
- Escrow of software source codes;
- Escrow of documents;
- Escrow of securities.
Implementation of the lawyer's escrow service is a common service provided by GRUBNER & PARTNERS to its clients and therefore the procedure and implementation of the escrow service is straightforward:
1. Contact our office:
- Phone tel: 224313793
- The online form below
2. Indicate what specific escrow service you need:
- Escrow of money in connection with the sale, purchase or donation of real estate;
- Escrow of money for other reasons;
- Escrow of money within business relationships;
- Escrow of SW source codes;
- Escrow of documents or securities.
3. We will contact you soon:
- You will obtain a quote; or
- We will need to clarify some issues related to the selected escrow service, based on which we will detail the various conditions according to your requirements and will send you a specific quote.
4. Acceptance of mutual conditions for the lawyer's escrow service and of the price quotation
5. We will send you a draft escrow agreement, which will include the specific conditions of escrow according to your requirements
6. Implementation of the lawyer's escrow
Price for the escrow of money:
- Escrow of amount from CZK 1,150 to CZK 100,000
- CZK 1,150 + 0.6% of the amount over CZK 100,000 up to CZK 500,000 in escrow
- CZK 3,500 + 0.4% of the amount over CZK 500,000 up to CZK 1,000,000 in escrow
- CZK 5,500 + 0.2% of the amount over CZK 1,000,000 up to CZK 10,000,000 in escrow
- CZK 20,000 + 0.1% of the amount over CZK 10,000,000
- The minimum reward for the lawyer's escrow service amounts to CZK 1,000.
- In the event that the amount deposited in escrow exceeds the amount of CZK 50,000 during one calendar year, a 20% discount on all escrow services will be provided in the following year.
- In the case of higher volumes of money deposited in escrow a special discounted price can be arranged.
Remuneration for escrow of software source codes:
- CZK 15,000/year – Basic fee for depositing software source code in escrow, in volumes up to 50 GB (the fee includes an agreement on escrow service according to the client's requirements, notification for the provider and the licensee of storage and release of source codes)
- CZK 1,500/year – Fee for a standard-size safe (5 CDs/DVDs or tapes)
- CZK 1,500/renewal – Renewal fee for each item deposited in escrow
- CZK 5,000/year – Renewal fee for unlimited period
- CZK 3,000 – Fee for the release of deposited source code from escrow to an authorised party
- CZK 2,000 – Fee for handover of the item deposited in escrow outside the registered seat of the law firm – source code
Prices do not include VAT
Remuneration for the escrow of securities and documents shall be set out individually.
You are buying real estate for CZK 3,000,000 and you require more assurance that, after the payment of the purchase price, your ownership writ will be recorded in the land register, without any undue delay and problems?
You will deposit the purchase price to the lawyer's escrow and the lawyer will pay the money to the seller only after the completion of registration in the land register. Our law office can also offer a review or preparation of a purchase contract and all services associated with the transfer of the ownership right. The price for the escrow service can then be included in the payment for these services. The lawyer's escrow service not only offers professional handling with funds in a separate account, but also more flexibility and most importantly it is possible to agree on the price of the escrow service on the basis of a contract.
Reasons for using our lawyer's escrow service:
- Fear that a burden will be put on the property after the signing of a letter of intent or purchase agreement and before the acquisition of ownership;
- Fear that the recovery of the purchase price will be difficult if the transfer fails or a burden will be put on the real estate in the meantime;
- Fear that the seller will not settle the real estate transfer tax – in such a case, the law stipulates that the buyer is a guarantor for the payment of the real estate transfer tax. Avoid this risk and let the lawyer pay the tax on behalf of the tax office from the deposited funds.
- Communication with the professional GRUBNER & PARTNERS law office
- Insurance of the lawyer;
- Money in escrow shall be deposited in a special account maintained by the bank;
- Legal guarantee concerning your requirements in a detailed written contract;
- Price is lower than in the case of notarial escrow services.
Real estate agency:
Real estate agents often offer free-of-charge escrow of the purchase price. Real estate agents, however, unlike a lawyer or notary, can not open accounts subject to a special legal regime for such purposes. These accounts of real estate agents are basically accounts, which allow normal operations by the real estate agent (unlike in the case of the lawyer) in the course of its business activities, i.e. – it can use it to settle its payments, invoices, etc. Similarly, you run the risk that the real estate agent pays the money to the counterparty, even in the case that the record from the land register is incorrect. Not to mention the protection of your ownership rights in the contract, or any other aspects that can be best handled by a law firm.
Only a lawyer's or notarial escrow service, or a special bank account, gives you the necessary confidence that the money will only be handled in accordance with the agreement on the escrow services.
Notarial escrow services, as well as the services provided by banks, are always provided for a price specified by tariffs, from which no derogation is possible, and it can be quite high. E.g. the price of the notarial escrow in relation to the purchase price of CZK 3,000,000amounts to CZK 9,600 without VAT according to the tariff.