Escrow is the term used when a contractual arrangement between two or more parties is put in place, in which an Escrow Company will hold funds or property during a transaction, acting as an independent third party.
When providing Escrow Services the Escrow Company acts as a third party to the transaction by holding the funds or property until pre-agreed conditions have been met. Once the conditions are met the Escrow Service provider will release the funds/ property held.
Whether you have never used an escrow service before or you a frequent user looking for some additional information, we have set out below answers to some of the questions which we are frequently asked.
Party A is buying a Boat, Party B is the Seller. Party A and Party B agree to use Lancaster Advisory as an independent third party to hold the funds for the purchase. Once the KYC/ AML checks have been completed, Lancaster Advisory will draft an Escrow Agreement.
The Escrow Agreement is tailored to the client’s needs, and contains conditions that must be met before the release of funds. These conditions are agreed by both Party A and Party B. The condition for this purchase is the delivery of the boat in good condition and in 6 months of the Escrow Agreement being dated.
Once the Escrow Agreement has been signed by both parties. Party A will then be asked to pay the Escrow amount into our escrow bank account. Lancaster Advisory will then verify the payment and notify both parties that the funds have been received into the escrow account. This is often referred to as putting money in escrow.
Party B will arrange transport of the boat. As per the Escrow Agreement, Party B will provide proof that the Boat has been collected by the transport company.
Party A receives the Boat in the expected condition and it has arrived before the 6 month cut-off date. Party A notifies Lancaster Advisory of this, providing the documents detailed in the Escrow Agreement.
Once Lancaster Advisory has confirmed that all the relevant conditions have been met, as set out in the Escrow Agreement, we will then release the money in escrow, paying out the money held in the escrow bank account to Party B, as set out in the Escrow Agreement.
When using an Escrow Service provider, we understand that it’s important to make sure you trust the Escrow Company you’ve chosen. At Lancaster Advisory we have taken multiple steps to provide peace of mind for all our customers.
Lancaster advisory is reigistered in England & Wales with company number 07870278. Lancaster Advisory Limited is authorised under the Payment Service Regulations 2017 for the provision of payment services.
When setting up an escrow account we carry out ‘Know your Client’ (KYC) checks / Anti-Money Laundering (AML) checks on all parties involved in the escrow transaction.
We will require Photographic Identification and proof of address, and may also ask for information regarding the source of funds being used for the transaction and source of wealth, from each of the involved individuals. Identity will also be verified whether in person or via Skype/facetime. It may be that one or more of the parties are Companies, in which case we will ask for KYC documents from one or more of the directors and shareholders.
If you would like more information on our KYC / AML process please don’t hesitate to contact us.
Lancaster Advisory utilizes the services of several leading UK and European banks. We have declared a trust over our dedicated client escrow bank account. The fact we operate a client account means that client funds are segregated from our own funds, and the trust adds additional peace of mind. Your money held by Lancaster Advisory would be safe even if Lancaster Advisory were to become insolvent, as the insolvency practitioners could not distribute client money to pay for debts of the business, as the trust segregates them.
HM Revenue & Customs: Lancaster Advisory is registered with HM Revenue & Customs as a ‘money transmitter’ under the Money Laundering Regulations of 2007.
Information Commissioner’s Office: Lancaster Advisory Limited is registered as a data controller with the Information Commissioner’s Office.
Please note that our authorisation with the Financial Ombudsman Service (“FOS”) applies only in relation to payment services transactions (principally transactions involving the holding and payment of funds), it does not relate to any other form of escrow service offered by us – for example where we hold real property.
This means that the Financial Ombudsman Service does not regulate us in respect of any escrow transactions other than payment services transactions.
As a result:
Lancaster Advisory is a UK based authorised escrow company helping businesses and individuals exchange assets and funds.
- info@lancasteradvisory.com
Lancaster Advisory Ltd is registered in England & Wales with company number 07870278. It is authorised under SIC 64999 and the Payment Service Regulations to provide payment services.
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