Construction Loan Escrow Agreement Template (Page 2 of 5) in pdf

II.

Prior to each disbursement of funds hereunder, it is a requirement of this escrow that the Escrowee be furnished:

An approved Owner's statement disclosing the various contracts entered into by the Owner and setting

forth the names of the contractors, their addresses, work and materials to be furnished, amounts of the

contracts, amounts paid to date, amounts of current payments and balances due;

A signed General Contractor's statement setting forth all contractors and material suppliers with whom he

has contracted, amounts of contracts, amounts paid to date, amounts of current payments and balances

due;

A written approval by the Owner/Borrower of the requested disbursement;

A report by the Inspector or a certification by the Architect certifying that work has been completed and

materials are in place as indicated by the request for payment of the General Contractor. Said inspection

is to be made and submitted by ;

Sufficient funds to cover the requested disbursements and to pay for extras or change orders for which

waivers have not been deposited and for which funds have not previously been deposited;

Statements, waivers, affidavits, supporting waivers and releases of lien from such persons and in such

form as may be required by First American Title Insurance Company for the purpose of providing the title

insurance coverage specified herein;

All required documentation for the final draw request must be submitted to the Escrowee prior to any

disbursements of the final draw.

III.

All disbursements for construction purposes will be made by the Escrowee directly to the General Contractor

and/or Subcontractors as Escrowee and/or Lender may determine OR directly to the General

Contractor, Subcontractors, vendors/suppliers and owner reimbursement. In the event that the

General Contractor and any subcontractor jointly authorize the Escrowee to pay any funds due one to the other,

the Escrowee may comply with such authorization. However, it is the intention of the parties named herein and

signatories hereto that no person not a party signatory to this escrow shall have the right to look to the Escrowee

for any disbursement hereunder, under a third party beneficiary theory or otherwise, and that the Escrowee owes

no duty to any such third party to make any disbursement.

IV.

As the Escrowee makes a partial disbursement of mortgage proceeds hereunder, it will furnish the Lender

the First American Title Insurance Company Endorsements, aforesaid, covering each requested disbursement.

If at any time during the course of construction the total of the unpaid disclosed cost of construction as indicated

by the column totals on the General Contractor's signed statement exceeds the amount of the undisbursed

mortgage proceeds as calculated by subtracting the total amount of liability taken on the endorsements from the

face amount of the mortgage, the Escrowee need not make further disbursements under the terms of this escrow

until the Owner/Borrower has deposited in this escrow the sum necessary to make the available funds equal to

the unpaid disclosed cost of construction, unless specifically directed to do so by the Lender. Also, if Escrowee

discovers a misstatement in an affidavit furnished by General Contractor or Owner/Borrower, it may stop

disbursement until the misstatement has been corrected. First American Title Insurance Company has no liability

hereunder to the Owner/Borrower relating to protection against mechanic's lien claims.

VI.

The functions and duties assumed by First American Title Insurance Company include only those described in this

agreement, and the Escrowee is not obligated to act except in accordance with the terms and conditions of this

escrow. First American Title Insurance Company does not insure that the building will be completed nor does it

insure that the building, when completed, will be in accordance with plans and specifications, nor that sufficient

funds will be available for completion, nor does it make the certifications of the Inspector/Architect its own, nor

does it assume any liability for same other than procurement as one of the conditions precedent to each

disbursement.

VII.

Bill all title and escrow charges to the owner. Escrow fees are payable when billed. If escrow fees are not paid

within fourteen (14) days of billing, Escrowee may cease making any further disbursements until escrow fees

have been paid.

Construction Loan Escrow Agreement Template Page 2

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