§449-16  Accounting for moneys, property,
etc.  (a)  Every licensee under this chapter shall have the responsibility
of a trustee for all moneys, other consideration, or instruments received by
it.  No licensee shall mingle any such moneys or other property with its own
moneys or other property, or with moneys or other property held by it in any
other capacity.  All moneys held by a licensee in escrow as herein defined
shall be deposited in financial institutions, payable on demand.  Under this
chapter, deposits in financial institutions are limited to sweep accounts as
described in this section, checking accounts, money market deposit accounts,
and savings accounts with no specified maturity date.  Deposits at financial
institutions may be held in sweep accounts, provided that:



(1)  The licensee using the sweep account shall have a
net worth of not less than $1,000,000;



(2)  The sweep account is a deposit account
administered by a financial institution in which the moneys over a minimum
balance are periodically transferred into a money market mutual fund account
invested only in obligations of:



(A)  The United States government;



(B)  Agencies backed by the full faith and
credit of the United States government; or



(C)  Agencies originally established or chartered
by the United States government to serve public purposes; and



periodically recredited to the sweep
account; and



(3)  The licensee is liable for all moneys transferred
to the money market mutual fund account under the sweep account, including any loss
of value.



(b)  No licensee shall disburse funds from an
escrow account until cash and or items sufficient to fund any disbursements
from the account have been received and deposited to the account, and with
respect to such items the licensee complies with the provisions of either
paragraphs (1) or (2) hereof.



(1)  Where an item has been received and submitted for
collection, no licensee shall disburse funds from an escrow account with
respect to the item until final settlement of the item has been received by the
financial institution to which the item has been submitted for collection.



(2)  No licensee shall disburse funds from the escrow
account with respect to an item drawn on a financial institution until the
licensee confirms that sufficient collected funds are on deposit in the
drawer's account.



(c)  A licensee may deliver any money,
consideration, or instrument affecting the title to real property prior to
funds becoming available for disbursement under subsection (b) if it has
received the written consent of the parties to the transaction. [L 1967, c 144,
pt of §1; HRS §449-16; am L 1985, c 269, §50; am L 1986, c 331, §3; am L 2001,
c 184, §5]



 



Case Notes



 



  Fiduciary duty of escrow depository owed only to escrow
parties.  4 H. App. 41, 659 P.2d 759.