Legal Question in Real Estate Law in New Jersey

Re: Attorney Trust Account - how safe is it?

The Attorney Escrow Account is a highly regulated bank account that is randomly audited by the State Of NJ. IT is customary for the attorney to distribute the proceeds. Usually, athe buyers attorney makes the distribution at the closing. He will issue checks for all money owed by both sides. In fact, you do not turnver the deed until all the outstanding items on the RESPA 9the settlement statement) are paid in full. If you have doubts about this you should talk to your attorney.

Re: Attorney Trust Account - how safe is it?

I TOTALLY AGREE WITH SCOTT, THAT THE ATTORNEY TRUST ACCOUNT IS THE TRADITIONAL MANNER OF HANDLING A REAL ESTATE CLOSING, RESIDENTAL AND/OR COMMERCIAL. WHILE THERE HAVE BEEN OCCASIONAL TIMES WHEN AN ATTORNEY HAS TAKEN THESE FUNDS, THEY ARE FEW AND FAR BETWEEN, AND THE CLIENT IS PROTECTED BY A FUND THAT WILL REIMBURSE FOR THE CLIENT, IN THE EVENT OF FRAUD. ALL ATTORNEYS LICENSED IN NJ MUST CONTRIBUTE AN ANNUAL FEE TO THIS FUND, SO IT MAINTAINS ITS VIABILITY. BY ISSUING A CHECK ON THE ATTORNET TRUST ACCOUNT, THE ATTORNEY IS ESSENTIALLY CERTIFYING THAT HE HAS GOOD FUNDS ON DEPOSIT SO THE CHECK WILL CLEAR WHEN PRESENTED. SINCE AN ATTORNEY CAN LOSE HIS LICENSE IF HE MISAPPROPRIATES MONEY FROM THIS ACCOUNT, AND, OVER THE YEARS, MANY HAVE BEEN DISBARED, NO ATTORNEY WILL RISK ISSUING A BAD CHECK. IN FACT, IF A CHECK IS DISHONORED, THE BANK MUST REPORT THIS TO THE STATE ETHICS COMMITTEE WHICH IMMEDIATELY LAUNCHES AN INVESTIGATION. BANKS AND MORTGAGE COMPANIES REGULARLY ACCEPT ATTORNEY TRUST CHECKS. IF YOU HAVE ANY DOUBTS ABOUT THE ATTORNEY INVOLVED, YOU CAN CHECK AT THE ATTORNEY GENERAL WEB SITE FOR NJ, WHICH MAINTAINS A LIST OF ALL ATTORNEYS WHO HAVE HAD ETHICS MATTERS INVESTIGATED.