                                 CODE OF VIRGINIA

CONDITIONS FOR PROVIDING ESCROW, CLOSING, OR SETTLEMENT SERVICES AND FOR
MAINTAINING ESCROW ACCOUNTS (§ 55.1-1008)

A. All funds deposited with the settlement agent in connection with an escrow,
settlement, or closing shall be handled in a fiduciary capacity and submitted
for collection to or deposited in a separate fiduciary trust account or accounts
in a financial institution authorized to do business in the Commonwealth no
later than the close of the second business day, in accordance with the
following requirements:

   1. The funds shall be the property of the person entitled to them under the
   provisions of the escrow, settlement, or closing agreement and shall be
   segregated for each depository by escrow, settlement, or closing in the
   records of the settlement agent in a manner that permits the funds to be
   identified on an individual basis; and

   2. The funds shall be applied only in accordance with the terms of the
   individual instructions or agreements under which the funds were accepted.

B. Funds held in an escrow account shall be disbursed only pursuant to a written
instruction or agreement specifying how and to whom such funds may be disbursed.
Funds payable to persons other than the settlement agent shall be disbursed in
accordance with § 55.1-903, except:

   1. Title insurance premiums payable to title insurers under &#xA7; 38.2-1813
   or to title insurance agents. Such title insurance premiums payable to title
   insurers and agents may be (i) held in the settlement agent&#8217;s settlement
   escrow account, identified and itemized by file name or file number, as a file
   with a balance; (ii) disbursed in the form of a check drawn upon the
   settlement escrow account payable to the title insurer or agent but maintained
   within the settlement file of the settlement agent; or (iii) transferred
   within two business days into a separate title insurance premium escrow
   account, which account shall be identified as such and be separate from the
   business or personal funds of the settlement agent. These transferred title
   insurance premium funds shall be itemized and identified within the separate
   title insurance premium escrow account. All title insurance premiums payable
   to title insurers by title insurance agents serving as settlement agents shall
   be paid in the ordinary course of business as required by subsection A of
   &#xA7; 38.2-1813; and

   2. Escrows held by the settlement agent pursuant to written instruction or
   agreement. A settlement statement or closing disclosure that has been signed
   by the seller and the purchaser or borrower shall be deemed sufficient to
   satisfy the requirement of this subsection.

C. A settlement agent may not retain any interest received on funds deposited in
connection with any escrow, settlement, or closing. An attorney settlement agent
shall maintain escrow accounts in accordance with applicable rules of the
Virginia State Bar and the Supreme Court of Virginia.

D. Nothing in this chapter shall be deemed to prohibit the recording of
documents prior to the time funds are available for disbursement with respect to
a transaction, provided that all parties consent to such recordation.

E. All settlement statements or closing disclosures for transactions related to
real estate governed by this chapter shall be in writing and identify, by name
and business address, the settlement agent.

F. Nothing in this section is intended to amend, alter, or supersede other
sections of this chapter, or the laws of the Commonwealth or the United States,
regarding the duties and obligations of the settlement agent in maintaining
escrow accounts.

HISTORY: 1997, c. 716, § 6.1-2.23; 1998, c. 69; 2001, cc. 316, 512; 2010, c.
794, § 55-525.24; 2016, c. 619; 2019, c. 712.