SG CORPORATE SERVICES PTE. LTD.
Escrow Service
What Are Escrow Services?
In an escrow arrangement, an impartial third party which known as the escrow service provider. It temporarily holds assets or funds on behalf of the transacting parties. These assets are only released when all conditions specified in the escrow agreement are satisfied, safeguarding both parties from potential fraud or disputes.
When is it needed?
Escrow services are commonly utilized in scenarios requiring a high degree of trust and accountability, including:
Property Transactions
In Singapore, it's legally mandated to engage a conveyancing lawyer and set up an escrow account for private property transactions.
Business Deals
When purchasing large shipments or engaging in substantial business transactions, using an escrow service ensures that both buyer and seller fulfill their contractual obligations.
Landlord and Tenant Agreements
In rental disputes, tenants may use escrow accounts to ensure landlords complete necessary repairs before releasing rental payments.
The Escrow Process
01
Agreement
The buyer and seller agree to the terms of the transaction and the conditions under which the escrow agent will release the funds or assets.
02
Deposit
The buyer deposits the agreed funds or assets into the escrow account managed by the escrow service provider.
03
Verification
The escrow agent verifies that all conditions of the agreement are met, such as the completion of property inspections or delivery of goods.
04
Release
Once all conditions are satisfied, the escrow agent releases the funds or assets to the seller, and ownership is transferred to the buyer.
Providers of Escrow Services in Singapore
In Singapore, escrow services are offered by various entities, including:
Law Firms
Many law firms provide escrow services, particularly for property transactions, ensuring legal compliance and proper handling of funds.
Banks
Certain banks offer escrow accounts to facilitate secure transactions between parties.
Singapore Academy of Law
This institution provides escrow services, leveraging its legal expertise to manage transactions effectively.
Cost of Escrow Services
The fees for escrow services in Singapore vary depending on the type of transaction and the service provider. For private property transactions, conveyancing fees, which include lawyer fees, stamping fees, and other related costs which can range from S$2,500 to S$5,000.
Benefits of Using Escrow Services
Engaging an escrow service is a prudent step in significant transactions, offering peace of mind and safeguarding the interests of all parties involved.
1
Security
Ensures that funds or assets are only released when all contractual conditions are met, protecting both parties.
2
Trust
Provides confidence in the transaction, as an impartial third party manages the process.Provides confidence in the transaction, as an impartial third party manages the process.
3
Legal Compliance
Particularly in property transactions, using escrow services helps ensure all legal requirements are fulfilled.