Legal Question in Real Estate Law in California

Re: Starting an Escrow Company

The answer falls into two parts: the things that are common to all business startups and those that are particular to the escrow company business.

In the first category are items such as choosing a form of business entity (proprietorship, partnership, LLC, corporation, etc.), obtaining adequate capital, acquiring the know-how to make your product or perform your services, and so on.....any book on how to start a small business will cover most of these topics in more or less satisfactory depth, clarity and accuracy. Unless you already have a lot of hands-on experience starting and running your own business, I'd get several such books and study them well.

The particular requirements for carrying on an escrow business include obtaining and maintaining a license and bond, and I believe an escrow company must be a corporation. There may be also a requirement that the person in charge have at least 5 years experience in the business.

The fundamental law covering the escrow business is in Division 6 of the California Financial Code, and encompasses sections 17000 through about 17701. In addition, regulations affecting the business are found in the California Code of Regulations beginning with 10 Cal.CodeRegs. 1709.

A thorough understanding of both the Financial Code and the applicable regulations is a necessity.

Another useful lead is the escrow industry's trade organization, the Escrow Institute of California, which has a very useful Web site containing many resources.