(not only, but also for yachts)
As a law firm, we know that the professional services of a competent and truly independent escrow agent can be an essential part of any sales transaction, not just yachts, aircraft, art or real estate.
For any transaction, trust is essential, particularly cross-border transactions. But because parties to a sales contract often do not know each other when they first agree on the terms, they must be sure that their contractual partners can and will fulfil their obligations under the contract i.e. down payments or stage payments.
While a notary usually acts as an intermediary for real estate with his escrow account, there is hardly any comparable instance in Europe (unlike in the USA) of high-value assets, in particular yachts and aircraft.
Although the purchase price is often deposited in a trust account there as well, it is usually a “special” account of the broker and is therefore not completely independent and thus not completely withdrawn from the access of one of the parties in the event of a conceivable reversal.
We offer these independent escrow services from our offices in Antibes and Hamburg.
In France we use CARPA (the association of French Bar Associations under whose supervision foreign money accounts are managed/administered and may be disbursed only in accordance with the contracts deposited as per the underlying transaction and the trust mandate.
In Germany we use attorney escrow accounts with established reputable banks.
For international mandates, particularly our clients in Asia especially China, we work with a Swiss private bank with branches in Geneva and Hong Kong.
We have conquered a niche as a reliable fiduciary service provider. We are aware of the enormous risk to which companies and individuals are exposed as they enter into strategic partnerships across national borders. With decades of experience in fiduciary services, we are at your disposal for personal online advice throughout the entire process.
WHAT IS AN ESCROW AGREEMENT?
An escrow agreement is an agreement between the depositor (usually the buyer), the beneficiary (usually the seller) and us acting as a fiduciary.
In this tripartite agreement, the depositor and the beneficiary agree on the trust relationship which we join as trustees.
According to this agreement, the depositor deposits a certain document or amount with us as escrow agent. While the transaction is being finalised, these monies are held safely and independently in our escrow account. The depositor therefore transfers his obligation to pay the beneficiary to us, because in the escrow agreement the depositor has stipulated that the escrowed funds must be released to the beneficiary only when the beneficiary completes an obligation or series of obligations as set out in the escrow agreement. Until then, the funds remain in the trust account.
Should the beneficiary fail however to fulfil its agreed contractual obligations, the depositor reserves the right to recover the funds from the escrow agent and reverse the transaction
To achieve the necessary trust, the escrow agreement must define clearly the following.
The specific contractual obligations of both parties, i.e. the depositor and the beneficiary including deadlines, quality standard and the exact amount of the escrow funds to be deposited.
Once the beneficiary has duly fulfilled their obligation and made the goods or services available to the depositor, the verification period begins. This is the period during which the depositor has the right to examine and then accept or reject the beneficiary’s goods or services. This right of refusal depends on quality, quantity or other parameters to be clearly stated in the trust agreement, as well as on the number of days foreseen for its performance. Upon successful completion of the inspection and receipt of the associated notification the law offices of Henning Schwarzkopf will pay the beneficiary on behalf of the depositor.
from the depositor The escrow agreement must specify in detail the express instructions to be fulfilled before the escrow funds are to be released to the beneficiary.
Dispute settlement mechanism
The escrow agreement must specify the method of dispute resolution such as the competent court, arbitration or mediation as well as applicable law. It must also clearly specify what happens if the resolution fails.
In general, an escrow account is closed after the successful completion of a transaction between the depositor and the beneficiary or when the depositor makes a payment, if the beneficiary fails to meet its contractual obligations.
The agreement must explicitly specify how and when any escrowed funds are to either party – account number, banking details etc. It should clearly describe the underlying transaction and the circumstances leading to the closing of the escrow account. In international transactions, it must also indicate the agreed exchange rate.
Yachts and aircraft are the focus of our escrow services because we have experience with both their legal and the technical issues. We also create value with our international network in the yacht and aircraft industries.
This fee is commensurate with amount of the escrow funds or assets in the transaction, the duration of the escrow and due diligence required