What is escrow?
Escrow is money or property held by a neutral third party until a specific condition is met, most homeowners know it from the mortgage closing process, but HOAs sometimes use it too, holding funds until a repair is completed or a dispute is resolved.
Why does escrow matter?
Escrow gives both sides in a transaction or agreement a reason to trust the process. Nobody has to hand over money on a promise alone, and nobody has to complete work without a guarantee they’ll actually get paid for it.
When You’ll Run Into This
This usually comes up around real estate closings or vendor contracts where a board wants a safeguard before releasing full payment.
