Escrow Agent –
Where Are You ?

Published: 11th March 2009Author: David Tan

An escrow agent in real estate business is an agent that is responsible for holding the money and title deed pending fulfillment of other conditions by the parties to the contract. This is a good risk management method.

Typically, the seller of a plot of land or house would let an escrow agent (neutral agent) hold the title deed and the buyer would let the escrow agent hold the deposit payment. The escrow agent shall release the title deed (plus arrange for ownership title transfer of property) to the buyer and hand the deposit over to the seller upon fulfillment of the contractual conditions.

This minimizes the risk of the buyer losing the deposit money to the seller if the seller does not come to sell the property to the buyer on the agreed upon day of sale due to: the seller subsequently finding another buyer who is prepared to pay a higher purchase price; the seller cannot complete construction of the property for sale; the seller disappearing with deposit money; the seller cannot release the mortgage or other kinds of encumbrances attached to the property etc. Furthermore, the involvement of an escrow agent protects the seller and the buyer from other kinds of fraudulent and deceptive practices.

In Thailand, however, escrow agent service was never solely offered by commercial banks or financial institutions because there had been no specific laws or regulations on this until May 19, 2008.

Under the Escrow Business Act B.E. 2551 (2008), effective as of May 19, 2008, an escrow agent must be a financial institution, a commercial bank, a financial company or other kinds of juristic person prescribed under ministerial regulations.

Some of the important provisions under the Act are:

An escrow contract must be drafted, signed by the seller, buyer and the escrow agent, and must stipulate certain conditions.

The escrow agent must be a neutral party with no connections whatsoever to either the seller or the buyer.

The escrow agent must open an escrow bank account for the contractual parties with a financial institution and deposit the money held into this escrow bank account.

In the event that the escrow agent is deemed a debtor under a court execution order, all property, money or title deed / other legal documents of the contractual parties that are held by the escrow agent are protected and not cease or use as payment for the escrow agent’s debt.

The escrow agent must inform the official at the Land Office in writing that the property is under an escrow contract and that transfer of ownership is not permitted until the escrow agent provides the Land Office with a written notice authorizing transfer of ownership. The official of the Land Office must make a record of these as evidence.

If there is a disagreement between the buyer and the seller under the escrow contract, the escrow agent shall not transfer money or property to either party until the contractual parties have reached an agreement or as according to a court order.

According to the Act, a financial institution, commercial bank or financial company who wants to operate as an escrow agent must obtain a license from the Ministry of Finance to provide escrow agent service.

The application and granting of this license shall be according to the standards, procedures and conditions as provided by ministerial regulations. Thus far, no license has been granted to any financial institution, commercial bank or financial company to provide escrow agent service. It may be some time until we will be able to find an escrow agent in a real estate transaction.


This means that we still have to use other kinds of protective measures e.g. in a sale and purchase of property contract, the seller and buyer open a joint bank account where the deposit money of the buyer will be paid in. The withdrawal or deposit of money from the bank account can only be made jointly by the seller and the buyer.


Written by David Tan. David is a Lecturer of Business Law at Asian University and author of the book "A Primer of Thai Business Law", available online at In Bangkok the book is available at all Kinokuniya and Asiabooks bookstores. Any questions or comments to David should be sent to blas.inter at


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