Purpose: A new rule concerning periodic reporting will help the division monitor compliance with chapter 18.44 RCW and the regulations adopted thereunder. Amendments to WAC 208-680F-020 and 208-680A-040 are needed to clarify the types of securities that may be substituted for the errors and omissions policy required by RCW 18.44.201.
Citation of Existing Rules Affected by this Order: Amending WAC 208-680F-020 and 208-680A-040.
Statutory Authority for Adoption: RCW 18.44.410.
Adopted under notice filed as WSR 04-22-087 on November 2, 2004.
Changes Other than Editing from Proposed to Adopted Version: WAC 208-680E-025 now has the following introductory clause to subsection (1): "For purposes of determining compliance with chapter 18.44 RCW and chapter 208-680 WAC." This language was added, in response to comments, to make explicit what the department believes was implicit in the proposed rule: That the new quarterly report should not request information that exceeds the department's authority.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 2, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 2, Repealed 0.
Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.
Date Adopted: January 6, 2005.
Helen P. Howell
WAC 208-680E-025 Quarterly reports. (1) For purposes of determining compliance with chapter 18.44 RCW and chapter 208-680 WAC, each escrow agent shall file with the director, within thirty days following the end of each fiscal quarter, a report concerning its operations and trust account administration and reconciliation. The report shall be on a form provided by the director and shall include exhibits as specified therein.
(2) As to trust account matters, the designated escrow officer of the escrow agent shall certify under penalty of perjury, in a manner consistent with RCW 9A.72.085, that he or she has reviewed the report and any exhibits filed with it and that the information contained in the report and in any exhibits is true and correct. The chief executive officer or chief financial officer of the escrow agent, or other knowledgeable person acceptable to the director, may certify the information on the report not related to trust account matters.
(3) Failure to file the report within the time period specified in this rule shall be considered a violation of RCW 18.44.430.
AMENDATORY SECTION(Amending WSR 01-08-055, filed 4/2/01, effective 5/3/01)
WAC 208-680F-020 Errors and omissions policy -- Securities alternative. ((
Each licensed escrow agent shall obtain and
keep in effect an errors and omissions policy providing
coverage in the minimum aggregate amount of $50,000 or,
alternatively, cash deposit or securities in the principal
amount of $50,000. )) (1) Securities used as an alternative to
an errors and omissions policy shall be effectively delivered
to the director(( . For the purpose of fulfilling the
requirements of chapter 18.44 RCW and these rules,)) and the
escrow agent shall execute an irrevocable assignment and any
supporting documentation as required by the director.
(2) Only those securities that meet the definition of
"investment securities" under chapter 208-512 WAC may be used
to satisfy RCW 18.44.201. Securities ((
which are stocks or
other interest in)) issued by the registered escrow (( agency))
agent or its affiliates are not acceptable securities for the
purposes of fulfilling the requirements of (( chapter 18.44 RCW
and these rules)) RCW 18.44.201.
[Statutory Authority: RCW 18.44.410. 01-08-055, § 208-680F-020, filed 4/2/01, effective 5/3/01. 96-05-018, recodified as § 208-680F-020, filed 2/12/96, effective 4/1/96. Statutory Authority: RCW 18.44.320. 94-04-050, § 308-128F-020, filed 1/31/94, effective 3/3/94; 88-19-016 (Order PM 763), § 308-128F-020, filed 9/9/88; 79-07-009 (Order RE 126), § 308-128F-020, filed 6/7/79. Statutory Authority: RCW 18.44.360. 78-08-027 (Order RE 124, Resolution No. RE 124), § 308-128F-020, filed 7/14/78; Order RE 122, § 308-128F-020, filed 9/21/77.]
AMENDATORY SECTION(Amending WSR 01-08-055, filed 4/2/01, effective 5/3/01)
WAC 208-680A-040 Definitions. The terms and definitions used in chapter 18.44 RCW have the same meanings given therein when used in these rules.
"Third party to the transaction" means those persons providing professional services necessary for the closing of the escrow. "Third party to the transaction" includes, but is not limited to: Real estate brokers, lenders, mortgage brokers, attorneys engaged to review the escrow, tax facilitators or underlying lien holders.
"Applicant" means any person applying for an escrow officer license or any person or group of persons applying for an escrow agent license. The term "applicant" includes the officers and controlling persons of the applicant, as well as any escrow officer seeking to become an escrow agent's designated escrow officer or designated branch escrow officer.
"Cash deposit" means funds deposited, in lieu of an errors and omissions policy, in an account in a recognized Washington state depository which account is maintained separate and apart from the escrow agent's own funds. The funds shall be deposited in such a manner to permit only the director to withdraw from the principal amount. The escrow agent may withdraw any interest accumulated to the account.
"Closing" means the transfer of title of real or personal property or execution of a real estate contract whichever event occurs first.
"Completed escrow" means a transaction in which the escrow agent has fully discharged its duties to the principal parties to the transaction. This includes obtaining all necessary documents, obtaining required signatures, completing reconveyance or title elimination, and disbursing funds to the principal parties to the transaction, the agents to the transaction, and to third parties to the transaction as agreed by the principal parties in the escrow instructions or on the settlement form (such as HUD1 or HUD1A).
"Conversion" means an unauthorized assumption and exercise of the right of ownership over moneys, property, or things of value belonging to another, to the alteration of the condition of, or the exclusion of the owner's rights to such moneys, property, or things of value. It includes any unauthorized act which deprives an owner of his/her property permanently or for an indefinite time, including but not limited to theft, embezzlement, forgery, swindling, and unauthorized control.
"Escrow instructions" are the instructions, signed by the principal parties to the transaction that identify the duties and responsibilities of the escrow agent in carrying out the escrow, that identify the thing or things of value held by the escrow agent and the specified condition or set of conditions under which the thing or things of value are to be transferred.
"Investigation" means an examination undertaken for the purpose of detection of violations of chapter 18.44 RCW, and these rules or securing information lawfully required under chapter 18.44 RCW, and these rules. The director or his or her designee may make private or public investigations.
"Officers" of the escrow agent shall include the president, secretary, treasurer, vice-president, and any other persons with control over management decisions of the escrow agent.
"Overdue instrument" means a negotiable instrument that is overdue as defined in RCW 62A.3-304.
"Permanent record" means any record required to be kept under RCW 18.44.400 for a period of six years from the completion of the escrow transaction.
"Principal parties" means the buyers and sellers in a purchase transaction, and the borrower in a refinance transaction.
"Reconveyance" means an instrument used to transfer title from an individual holding such title in trust to the equitable owner of real estate, when title is held as collateral security for a debt.
"Securities" means any stock, treasury bill, bond,
debenture or collateral-trust certificate tendered in lieu of
an errors and omissions policy. It does not mean or include
any insurance or endowment policy, annuity contract or letter
"Split escrow" means a transaction in which two or more escrow agents act to effect and close an escrow transaction.
"Transfer of title" occurs at the time the seller executes a deed or bill of sale and such is delivered to the purchaser or recorded.
"Trust" means a fiduciary relationship whereby a thing of value is delivered to an escrow agent with the intention that such thing of value be administered by the escrow agent for the benefit of the principal parties to the transaction.
"Trust account" or "trust bank account" means a bank account holding funds of any party to the transaction.
"Unclaimed funds" means any funds that are abandoned under the Uniform Unclaimed Property Act, chapter 63.29 RCW.
[Statutory Authority: RCW 18.44.410. 01-08-055, § 208-680A-040, filed 4/2/01, effective 5/3/01. Statutory Authority: RCW 42.320.040 [43.320.040] and 18.44.320. 96-21-082, § 208-680A-040, filed 10/16/96, effective 11/16/96. 96-05-018, recodified as § 208-680A-040, filed 2/12/96, effective 4/1/96. Statutory Authority: RCW 18.44.320. 94-04-050, § 308-128A-040, filed 1/31/94, effective 3/3/94; 88-19-016 (Order PM 763), § 308-128A-040, filed 9/9/88; 79-07-009 (Order RE 126), § 308-128A-040, filed 6/7/79; Order RE 122, § 308-128A-040, filed 9/21/77.]