- a contract, deed, bond, or other written agreement deposited with a third person, by whom it is to be delivered to the grantee or promisee on the fulfillment of some condition.
verb (used with object)
- to place in escrow: The home seller agrees to escrow the sum of $1000 with his attorney.
- in escrow, in the keeping of a third person for delivery to a given party upon the fulfillment of some condition.
- money, goods, or a written document, such as a contract bond, delivered to a third party and held by him pending fulfilment of some condition
- the state or condition of being an escrow (esp in the phrase in escrow)
- to place (money, a document, etc) in escrow
1590s, from Anglo-French escrowe, from Old French escroue “scrap, roll of parchment,” from a Germanic source akin to Old High German scrot “a scrap, shred, a piece cut off” (see shred (n.)). Originally “a deed delivered to a third person until a future condition is satisfied;” sense of “deposit held in trust or security” is from 1888.
The condition of being ineffective until certain conditions are met. For example, money inherited by a minor might be held in escrow until the heir reaches a certain age. Homeowners with mortgages frequently pay money for insurance and taxes on their home into an escrow account each month. The holder of the mortgage then pays the insurance and tax bills out of the escrow account when the bills are due.
In trust with a third party for delivery after certain conditions are fulfilled. For example, Our down payment on the house is in escrow until the current owner makes the promised repairs. This legal term dates from the late 1800s.