Under California law, which of the following best describes the legal role of an escrow holder in a real estate transaction?
Correct Answer
B) A neutral depository that holds funds and documents and disburses them only when all conditions are satisfied
Under California Financial Code §17003, escrow is defined as a transaction in which instruments or money are deposited with a third party to be delivered upon the performance of a specified condition. The escrow holder is a neutral stakeholder — it holds funds and documents from both parties and disburses them only after all written escrow instructions have been fulfilled. The escrow holder owes equal duties to both buyer and seller and may not favor either party.
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Under California law, what is the term for the concept describing the sequential chain of recorded ownership transfers and encumbrances affecting a specific parcel of real property, tracing title from an original grant to the present?
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During escrow for a residential property in Pasadena, the buyer and seller provide separate, conflicting escrow instructions regarding who pays for the home warranty. The escrow officer notices the discrepancy. Under California escrow law, what should the escrow officer do?