What Los Angeles Residents Need to Know –
If you’re buying a home, selling a business, or handling a large financial transaction in Los Angeles, escrow accounts play a critical role in protecting your money. But did you know that California has some of the strictest escrow regulations in the country?
At Secured Trust Escrow, we help clients navigate these rules every day. In this guide, we’ll break down:
✔ Who regulates escrow in California
✔ Key laws affecting buyers and sellers
✔ How to avoid common escrow pitfalls in LA
Who Oversees Escrow Companies in California?
Escrow companies in Los Angeles must be licensed and regulated by:
– California Department of Financial Protection & Innovation (DFPI) – Ensures compliance with financial laws.
– California Escrow Law (Financial Code §17000-17606) – Sets rules for handling client funds.
– Local LA County/City Requirements – Some transactions need extra disclosures (e.g., earthquake zones, environmental hazards).
Why does this matter?
Unlicensed escrow agents have been behind some of LA’s biggest real estate scams. Always verify your escrow company’s license [here](https://dfpi.ca.gov).
Key California Escrow Laws You Should Know
1. Escrow Funds Must Be Held in Trust
– By law, escrow money cannot be mixed with company operating accounts.
– Funds must be held in FDIC-insured banks or approved trust accounts.
2. Strict Timelines for Disbursements
– Residential purchases: Funds typically release within 24-48 hours of closing.
– Delays can happen if there are title issues or last-minute disputes.
3. Mandatory Escrow Instructions
Every escrow must have written, signed instructions detailing:
✔ Who gets paid
✔ When funds release
✔ What happens if there’s a dispute
Pro Tip: Never rely on verbal agreements—always get it in writing.
Common Escrow Problems in Los Angeles (And How to Avoid Them)
❌ Wire Fraud Scams
LA is a hotspot for escrow wire fraud. Red flags:
– Last-minute email changes to wiring instructions
– Pressure to send money quickly
How to protect yourself:
✔ Call your escrow officer to confirm details using a known phone number (not one from an email).
✔ Use encrypted payment portals when possible.
❌ Delays Due to Missing Documents
Common hold-ups in LA escrows:
– Unrecorded liens
– Missing signatures on deeds
– Unpaid property taxes
Solution: Work with an experienced LA escrow company that double-checks paperwork early.
How Long Does Escrow Take in Los Angeles?
| Transaction Type | Average Timeline
| Residential Purchase | 30-45 days
| Commercial Real Estate | 45-90 days
| Business Sale | 60+ days
Faster options? Some cash buyers close in 7-14 days with pre-approved funds.
What Happens If Escrow Falls Through?
In LA, deals can collapse due to:
✔ Financing denials
✔ Inspection issues
✔ Title problems
Your options:
1. Get deposits back (if contingencies are in place).
2. Renegotiate terms (common in slow markets).
3. Dispute resolution (if the seller refuses to refund).
Why Choose a Local LA Escrow Provider?
A national bank might not understand:
✔ LA’s competitive housing market (all-cash offers, bidding wars).
✔ Local permit issues (ADUs, zoning laws).
✔ High-risk fraud areas (wire scams target luxury markets like Beverly Hills).
At Secured Trust Escrow, we’ve handled thousands of LA transactions—we know how to keep your deal on track.
California’s escrow laws exist to protect you—but only if you work with a licensed, experienced provider. Whether you’re buying a condo in DTLA or selling a business in Santa Monica, always:
✔ Verify your escrow company’s license
✔ Get everything in writing
✔ Stay alert for fraud
Need an Escrow Expert in Los Angeles?
📞 Contact Secured Trust Escrow for a smooth, secure transaction.
