Opinion #141. Real Estate Escrow Accounts as Trust Accounts
Issued by the Professional Ethics Commission
Date Issued: June 30, 1994
The Commission has received an inquiry concerning the proper interpretation of Maine Bar Rules 3.6(e) and 6 (as amended effective July 1, 1994) with respect to the administration of escrow accounts used by the firm exclusively in connection with real estate closings. Some of the “escrow accounts” bear interest on an average daily balance; some bear no interest. The funds are customarily deposited in the accounts the day of the disbursements, so the “float” in the account is minimal, usually just a day or two.
Are the “real estate escrow accounts” described above subject to the provisions of Rule 3.6(e) and Rule 6?
Neither of the Rules cited makes any distinction between the “escrow” accounts described above and any other trust account. The Rule as recently amended gives the attorney two choices. Either the accounts may be maintained and administered as IOLTA accounts or they may be maintained as non-interest bearing (i.e., non-IOLTA) accounts. The new Rule requires that either all such accounts be IOLTA accounts or that all such accounts be non-interest bearing non-IOLTA accounts (see Rule 3.6(e)(4),(5), the single exception from the “all-in or all-out” requirement being for funds of the United States Government (see amendments to Maine Bar Rules 3.6(e)(4) and (5), effective April 29, 1994). As drafted, except in that single exception, the Rule does not appear to permit a lawyer or a firm to have both IOLTA and non-IOLTA accounts.
In either case the reporting requirements set forth in Maine Bar Rule 6 are applicable with respect to each such account.