Escrow

Escrow

This article is about the legal arrangement. For its use in the field of cryptography, see Key escrow.

Escrow is a legal arrangement in which an asset (such as cash, real property or other tangible assets) is deposited into safekeeping (e.g., a bank account) under the trust of a neutral third party (escrow agent) pending satisfaction of contractual contingency or condition. Once the condition has been met, the escrow agent will deliver the asset to the party prescribed by the contract.

Alternative definitions of a escrow account are 'an account established by a broker under the provisions of the licence law for the purpose of holding funds on behalf of the broker's principle or some other person until the consummation or termination of a transaction' or 'a trust account held in the borrower's name to pay obligations such as property taxes and insurance premiums'.