What constitutes proper broker escrow handling in NY?

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The main idea is that brokers must keep client funds in a dedicated escrow or trust account, separate from the broker’s own business funds, and disburse them only according to the contract terms or a legal order. This separation protects clients’ money, provides a clear audit trail, and prevents comingling of funds. Escrow deposits should be promptly placed into the escrow account and regularly reconciled. Any interest earned may be credited to the client or handled per applicable rules. Disbursement happens when the contract conditions are satisfied or when a court or regulatory order authorizes payment. If a dispute arises, the broker typically holds the funds until resolution or until an authorized disbursement is made. It isn’t appropriate to keep escrow funds in a personal checking account or to mix them with operating cash. While title companies can handle closing tasks, brokers must maintain a separate escrow account and manage the funds responsibly, not rely solely on a title company.