PROHIBITED CONDUCT
No escrow holder/agent licensee may disseminate misleading statements or describe as an “escrow” any
transaction that is not included under the definition of “escrow” in the Financial Code or in the Civil Code.
An escrow holder/agent may not pay fees to real estate brokers or others for referral of business. Such
prohibited “fees” would include gifts of merchandise or other things of value.
An escrow holder/agent cannot disburse from the escrow proceeds a real estate broker’s commission prior to
closing of the escrow.
Escrow holders/agents may not solicit or accept escrow instructions, or amended or supplemental instructions,
containing any blank to be filled in after signing or initialing. They may not permit any person to make any
addition to, deletion from, or alteration of an escrow instruction, unless it is signed or initialed by all principals
who had previously signed or initialed the instructions. At the time of execution, escrow holders/agents are
charged by law with delivering a copy of any escrow instruction, or amended or supplemental instruction, to all
principals executing the instructions. However, escrow instructions, being privileged and confidential, may not
be disclosed to non-principals.
Real estate brokers when conducting escrows must follow similar standards of conduct and as required in the
Real Estate Law and the Commissioner’s Regulations pertaining thereto, including 2830.1 et seq. and 2950 and
2951.
A real estate broker may not nominate an escrow holder/agent as a condition precedent to a transaction, but
may suggest an escrow holder/agent, if requested to do so by the principals to the transaction. The buyer in the
real estate sales transaction generally makes the selection of the escrow holder/agent and the title insurance
company intending to issue the title insurance coverage.