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Post-Disaster Resolution

Almost every attorney has $50 or $500 sitting in an escrow account, stuck there for years because the parties disagree about how the money should be paid out.

 

Maybe a buyer says the seller damaged the front door while moving out post-closings (couches and beds have been known to grow larger once inside a house), or maybe a plumbing leak was not addressed properly.  There are plenty of reasons why small amounts of money linger too long in escrow, from trivial squabbles to overly cautious counsel.

 

A colleague was griping to me recently about $250 sitting in his escrow account. “It’s too little for anyone to sue over, but buyers and sellers hate each other’s guts, so I can’t get them to even agree to split it.”

 

“Why don’t you do what I do?” I asked him.  Every time I’ve had minor money in escrow with parties on opposite ends of the decision spectrum (or uninterested in even discussing disposition), I’ve seized on a heart-tugging charity or tragic natural disaster to get the money out of my account.

 

“I’ve asked parties to give the money to the Mothers against Drunk Driving, Habitat for Humanity, the American Red Cross, tsunami relief, and earthquake assistance. No one ever has said ‘no.’ Recently, I had $200 left since 2005 to assure busted sprinkler heads were repaired. The seller swore he fixed them, the buyer claims they still leak. Tragedy unfortunately struck once again, and a few days later, flood victims had $200 more towards getting back on their feet.”

 

The other attorney whistled at the idea, and complimented me. I can take credit for the inspired dispute resolution, but I’m not sure I deserve a compliment for aiding the unfortunate out of the spoils of petty bickering.

Comments

( 2 comments — Leave a comment )
(Anonymous)
Jun. 21st, 2011 01:27 pm (UTC)
My escrow agreement establishes that I am to be paid a maintenance fee of $100.00 per year out of any money remaining from such a dispute after a one year grace period. I have never had one go more than two years.
real_lawyer
Jun. 21st, 2011 01:32 pm (UTC)
That sounds like a good solution, but I'm not sure how the powers-that-be view it. Are you in NY? Do you have any ruling or decision saying that it's acceptable for escrowees to remove a fee without further consent or a court order?
( 2 comments — Leave a comment )

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