Legal Question in Real Estate Law in New York

Re: Escrow

Generally, the contract of sale's escrow provisions should indicate that interest borne on money held by the escorw agent is due to the escrowing party.

Re: Escrow

Whatever interest there is generally goes to whoever receives the balance in the escrow. But the question remains, is there interest?

It depends. There are two kinds of attorney trust fund accounts in New York: IOLA and segregated escrow. IOLA accounts are supposed to be used for small amounts and/or amounts that are held for only a short period of time. The interest earned by an IOLA account is transferred to the State of New York and used to fund the system that tries to reimburse victims when a lawyer absconds with the funds.

A separate escrow account is supposed to be used for larger sums that are not being disbursed in short order. I don't know about other banks, but mine pays a whopping 0.5% per year. Not something to lose sleep about.