CAR Says Some Firms Misapply Check-Hold Law

Representatives of some title and escrow companies are misinterpreting a new state law, causing “considerable confusion” in California’s real estate market, according to the California Assn. of Realtors.

The law, which took effect Jan. 1, allows title and escrow companies to place a variety of different holds on funds that are deposited in escrow accounts. Personal checks drawn on a local bank can usually be held for up to three business days, according to the realty group, while checks drawn on an out-of-town bank can be held for up to seven days.

However, the realtors claim, some escrow and title companies are applying the same rules to certain cashier’s and certified checks that, under law, usually can’t be held for more than one business day.

“We believe that most escrow agents are disbursing funds as soon as they become available, but some escrow and title companies apparently have misinterpreted the law or have been misinformed about requirements of the new law,” said Jim Antt Jr., president of the California Assn. of Realtors.

Buyers and sellers can face additional costs if their escrow is delayed, Antt said.