Code Section Group

Financial Code - FIN

DIVISION 6. ESCROW AGENTS [17000 - 17703]

  ( Division 6 enacted by Stats. 1951, Ch. 364. )

CHAPTER 1. Application of This Division [17000 - 17010]
  ( Chapter 1 enacted by Stats. 1951, Ch. 364. )

17000.
  

This division is known and may be cited as the “Escrow Law.”

(Enacted by Stats. 1951, Ch. 364.)

17001.
  

Unless the context otherwise requires, the definitions set forth in this chapter govern the construction of this division.

(Enacted by Stats. 1951, Ch. 364.)

17002.
  

“Commissioner” means the Commissioner of Business Oversight.

(Amended by Stats. 2013, Ch. 353, Sec. 63. Effective September 26, 2013. Operative July 1, 2013, by Sec. 129 of Ch. 353.)

17002.5.
  

“Person” means, in addition to the singular, persons, group of persons, co-operative, association, company, firm, partnership, corporation, limited liability company, or other legal entity.

(Amended by Stats. 1994, Ch. 1010, Sec. 114. Effective January 1, 1995.)

17003.
  

(a) “Escrow” means any transaction in which one person, for the purpose of effecting the sale, transfer, encumbering, or leasing of real or personal property to another person, delivers any written instrument, money, evidence of title to real or personal property, or other thing of value to a third person to be held by that third person until the happening of a specified event or the performance of a prescribed condition, when it is then to be delivered by that third person to a grantee, grantor, promisee, promisor, obligee, obligor, bailee, bailor, or any agent or employee of any of the latter.

(b) With regard to Internet escrow companies, “escrow” also includes any transaction in which one person, for the purpose of effecting the sale or transfer of personal property or services to another person, delivers money, or its Internet-authorized equivalent, to a third person to be held by that third person until the happening of a specified event or the performance of a prescribed condition, when it is then to be delivered by that third person to a grantee, grantor, promisee, promisor, obligee, obligor, bailee, bailor, or any agent or employee of any of the latter.

(Amended by Stats. 2000, Ch. 437, Sec. 1. Effective January 1, 2001.)

17004.
  

“Escrow agent” means any person engaged in the business of receiving escrows for deposit or delivery.

(Amended by Stats. 1981, Ch. 773, Sec. 1.)

17004.5.
  

“Internet escrow agent” means any person engaged in the business of receiving escrows for deposit or delivery over the Internet.

(Added by Stats. 1999, Ch. 441, Sec. 2. Effective January 1, 2000.)

17005.
  

“Licensee” means any person holding a valid, unrevoked license as an escrow agent.

(Enacted by Stats. 1951, Ch. 364.)

17005.1.
  

“Joint control agent” means a person engaging in the business of receiving money or other property for disbursal or use in payment of the cost of labor, materials, services, permits, fees, or other items of expense incurred in the construction of improvements upon real property. As used in this section, “in the business” means the conduct of the aforesaid transaction either for compensation or without compensation as a primary business or as an incidence to another business, but shall not mean the conduct of the business of real estate lending or of acting as an authorized representative, agent or loan correspondent for such a lender.

(Added by Stats. 1965, Ch. 287.)

17005.2.
  

“Business location” and “business office location” mean a facility or other place of business where a person engages in the business of receiving an escrow for deposit or delivery, but does not include a customer contact center.

(Added by Stats. 2000, Ch. 437, Sec. 2. Effective January 1, 2001.)

17005.3.
  

“Customer contact center” means a facility operated by an Internet escrow agent that exists solely for the purpose of responding to customer electronic messages and telephone inquiries; provided, that no receipt or disbursements relating to an escrow are made from the facility; and provided further, that any documentation or other material generated, transmitted, or otherwise sent from the facility can be reviewed at any time from the business location of the Internet escrow agent.

(Added by Stats. 2000, Ch. 437, Sec. 3. Effective January 1, 2001.)

17005.4.
  

“Person subject to this division” means any person undertaking the performance of escrow agent services. Unless specifically exempted, as in Section 17006, however, this definition shall not be used to exclude anyone.

(Added by renumbering Section 17005.3 (as renumbered from 17005.5 by Stats. 1999, Ch. 441) by Stats. 2002, Ch. 772, Sec. 10. Effective January 1, 2003.)

17005.5.
  

“Within this state” means any activity of a person relating to receiving escrows for deposit or delivery that originates from this state and is directed to persons outside this state, or that originates from outside this state and is directed to persons inside this state, or that originates inside this state and is directed to persons inside this state, or that leads to the formation of a contract and the offer or acceptance thereof is directed to a person in this state, whether from inside or outside this state and whether the offer was made inside or outside this state.

(Added by Stats. 1999, Ch. 441, Sec. 4. Effective January 1, 2000.)

17005.6.
  

Except as provided for in Section 17004, “escrow agent” as used in this division includes joint control agents and Internet escrow agents.

(Amended by Stats. 1999, Ch. 441, Sec. 5. Effective January 1, 2000.)

17006.
  

(a) This division does not apply to:

(1) Any person doing business under any law of this state or the United States relating to banks, trust companies, building and loan or savings and loan associations, or insurance companies.

(2) Any person licensed to practice law in California who has a bona fide client relationship with a principal in a real estate or personal property transaction and who is not actively engaged in the business of an escrow agent.

(3) Any person whose principal business is that of preparing abstracts or making searches of title that are used as a basis for the issuance of a policy of title insurance by a company doing business under any law of this state relating to insurance companies.

(4) Any broker licensed by the Real Estate Commissioner while performing acts in the course of or incidental to a real estate transaction in which the broker is an agent or a party to the transaction and in which the broker is performing an act for which a real estate license is required.

(b) The exemptions provided for in paragraphs (2) and (4) of subdivision (a) are personal to the persons listed, and those persons shall not delegate any duties other than duties performed under the direct supervision of those persons. Notwithstanding the provisions of this subdivision, the exemptions provided for in paragraphs (2) and (4) of subdivision (a) are not available for any arrangement entered into for the purpose of performing escrows for more than one business.

(Amended by Stats. 1998, Ch. 641, Sec. 14. Effective January 1, 1999.)

17006.5.
  

In any proceeding under this law, the burden of proving an exemption or an exception from a definition is upon the person claiming it.

(Added by Stats. 1978, Ch. 778.)

17008.
  

No foreign corporation shall transact any escrow business in this State without first complying with all the requirements of this division, nor until it has executed and filed with the commissioner a written instrument appointing the commissioner its attorney upon whom all process in any action or proceeding by any resident of this State against it may be served with the same force and effect as if such corporation were formed under the laws of this State, and had been lawfully served with process in this State. Service of process by a resident of this State upon the commissioner constitutes personal service on the foreign corporation.

(Amended by Stats. 1961, Ch. 475.)

17009.
  

The commissioner shall forward by prepaid registered mail a copy of every paper served under this chapter, to the secretary of the corporation at its last known post-office address as shown by the records and reports of the corporation filed in the office of the commissioner.

(Enacted by Stats. 1951, Ch. 364.)

17010.
  

The commissioner shall collect from the plaintiff at the time of service, the sum of two dollars ($2) for each copy of process served on him pursuant to this chapter. This sum shall be recovered by the plaintiff as part of his taxable costs, if he succeeds in the suit or proceeding.

(Enacted by Stats. 1951, Ch. 364.)

FINFinancial Code - FIN