Unclaimed Escrow Accounts: How Real Estate Funds Can End Up With the State
In the complex world of real estate transactions, escrow accounts are essential tools for managing and safeguarding funds during the buying and selling process. However, what many people don’t realize is that unclaimed escrow balances can end up in the hands of the California State Controller’s Office (SCO) as unclaimed property. Whether you’re a homeowner, buyer, seller, real estate agent, or escrow officer, understanding how and why this happens is crucial. In this article, we break down the reasons, processes, and solutions related to unclaimed escrow accounts in California.
What Is an Escrow Account?
An escrow account is a temporary financial arrangement where a third party (usually an escrow company or agent) holds funds on behalf of the buyer and seller during a real estate transaction. These funds may include:
- Earnest money deposits
- Property tax or insurance prepayments
- Repair credits
- Excess closing funds
- Proceeds from a canceled sale
- Refunds after closing
Escrow accounts ensure that no party gains unfair advantage and that funds are distributed fairly once all contractual obligations are met.
How Escrow Funds Become Unclaimed
Despite stringent processes, funds can go unclaimed due to various factors:
1. Deal Cancellation Without Follow-Up
If a real estate transaction is canceled and one party is entitled to a refund, they must actively claim the balance. Failure to do so may leave the funds dormant in the account.
2. Overpayments at Closing
Sometimes, overpayments happen due to rounding issues, duplicate charges, or unclaimed rebates. If the overpayment is not refunded or acknowledged, it may sit untouched.
3. Unknown Beneficiaries
If an escrow agent cannot locate the rightful owner of the funds (perhaps due to a name mismatch, incorrect mailing address, or deceased party), the account may be considered abandoned.
4. Outdated Contact Information
Buyers or sellers who move without updating their mailing address or phone number may never receive their refund check or notice of unclaimed funds.
5. Undeliverable Checks
Refund checks sent to incorrect or outdated addresses often go uncashed. After several failed attempts, companies may mark the funds as unclaimed.
What Happens to Unclaimed Escrow Funds?
Under California’s Unclaimed Property Law (Code of Civil Procedure Section 1500 et seq.), businesses holding dormant funds for three years or longer must report and remit them to the State Controller’s Office (SCO). This includes:
- Title companies
- Escrow companies
- Mortgage brokers
- Real estate agents handling client trust funds
Once the funds are transferred, the owner must file a claim with the State of California to retrieve their money.
The California Unclaimed Property Reporting Process
Escrow companies and real estate professionals are legally required to follow these steps:
- Identify Dormant Accounts:
Accounts with no activity for three years must be flagged as potentially unclaimed. - Attempt to Contact Owners:
At least 6 to 12 months before remittance, holders must send due diligence letters to the last known address of the property owner. - Report to the State:
Holders file a Notice Report with the SCO in advance of remitting the funds. - Remit Funds:
If the owner does not respond, the funds are sent to the state during the Remit Report period. - Public Listing:
The owner’s name, last known address, and the amount of money are published on the California Unclaimed Property database, accessible to the public.
How to Find Out If You Have Unclaimed Escrow Funds
If you’ve ever bought or sold a home in California, it’s worth checking for forgotten escrow funds. Here’s how:
✅ Step 1: Visit the State Controller’s Website
Go to: https://ucpi.sco.ca.gov
✅ Step 2: Enter Your Name
Search by individual name, business name, or estate. Use variations of your name to ensure thorough results.
✅ Step 3: Review Listings
Look for entries that mention:
- Escrow company names
- Real estate brokerages
- Title companies
✅ Step 4: File a Claim
Click “Claim this Property”, complete the online form, and upload any required documentation.
Real-Life Example: Sarah’s Forgotten Refund
Sarah sold her home in Anaheim in 2017. After closing, her escrow company issued her a check for a $275 overpayment. Unfortunately, the check was mailed to her old address, and she never received it. By 2021, the company turned the funds over to the California State Controller’s Office.
In 2024, Sarah was surprised to find her name on the unclaimed property website. She filed a claim, uploaded a copy of her old escrow documents and ID, and received her check in the mail two months later.
Why Real Estate Funds Often Get Lost
Escrow transactions are inherently complex and time-sensitive. Some contributing reasons for unclaimed funds include:
- Multiple stakeholders: Buyer, seller, agents, lenders, and escrow officers each handle pieces of the process, leading to communication gaps.
- Uncashed checks: Some refund checks are misplaced or never deposited.
- Corporate mergers: If a title or escrow company merges or is acquired, tracking old records may be difficult.
- Beneficiaries passing away: Heirs may not realize an escrow refund is owed to an estate.
What Documents Can Help You Claim Escrow Funds?
If you find a listing on the California unclaimed property site, you may need to provide:
- Escrow closing statements
- Proof of property sale or purchase
- Government-issued ID
- Change-of-address documentation
- Marriage certificates (if your name changed)
- Death certificates or probate documents (for heirs or estates)
For Heirs and Executors: Claiming Escrow Funds for a Deceased Person
If the original property owner has passed away, their unclaimed escrow balance can still be recovered. You will typically need:
- Death certificate
- Proof of your relationship to the decedent
- Legal documentation (e.g., will, letters of administration, small estate affidavit)
- Your own identification
California allows surviving family members, trustees, and estate executors to recover unclaimed funds as long as proper documentation is submitted.
Can Escrow Companies Help You Track Down Old Funds?
Yes. If you suspect you’re owed money but don’t see a record with the state, consider contacting:
- The escrow company that handled your transaction
- The title insurance company
- Your real estate agent
- The lender involved in the transaction
Request a Final Closing Statement or Disbursement Summary to see if there were any refunds issued.
Claim My CA Property: We Help You Retrieve What’s Rightfully Yours
Navigating the state’s unclaimed property system can be time-consuming and confusing. That’s where Claim My CA Property comes in. Our expert team of professional asset investigators:
- Research your claim and verify records
- Locate and compile required documents
- Submit complete and accurate claims
- Track claim progress and respond to state correspondence
We specialize in real estate-related unclaimed funds, including escrow refunds, excess proceeds, and unclaimed mortgage payoffs.
How Long Do You Have to Claim Escrow Funds?
There is no statute of limitations for unclaimed property in California. You can file a claim at any time, even if the funds were turned over decades ago.
However, the longer you wait, the harder it may be to retrieve supporting documents. Act promptly to preserve your rights and reclaim your money.
Protecting Yourself From Losing Escrow Funds in the Future
To avoid unclaimed escrow issues:
- Use a reputable escrow company
- Review your Final Closing Disclosure thoroughly
- Update your mailing address before or after closing
- Follow up on any refunds within 30–60 days of closing
- Keep a digital copy of your closing statement and escrow documents
Final Thoughts
Unclaimed escrow accounts may seem like a small issue, but they represent millions of dollars held by the State of California on behalf of unaware individuals. Whether due to a canceled deal, overpayment, or simply a lost check, these funds rightfully belong to property buyers, sellers, or their heirs.
If you suspect you might have unclaimed escrow money—or want expert help researching your case—Claim My CA Property is here to help. We specialize in real estate-related asset recovery and take care of the paperwork so you can recover your funds without hassle.
✅ 25 Useful Backlinks
- California State Controller’s Office – Unclaimed Property
- Unclaimed Property Search
- Code of Civil Procedure Section 1500
- Escrow Institute of California
- California Department of Real Estate
- Consumer Financial Protection Bureau – What is Escrow?
- California Association of Realtors
- U.S. Department of Housing and Urban Development (HUD)
- National Association of Realtors
- California Land Title Association
- California Bureau of Real Estate Appraisers
- California Legislative Information – Unclaimed Property Law
- California Probate Code
- Consumer Affairs – Real Estate Escrow FAQs
- IRS – Real Estate Tax Deductions
- FTC – Buying a Home Guide
- Better Business Bureau – Escrow Scams
- CFPB – Closing Disclosure Explained
- California Courts – Small Estate Affidavit Info
- Los Angeles County Assessor – Property Info
- Zillow Guide to Real Estate Transactions
- Realtor.com – Closing Costs Overview
- Nolo – Real Estate Refund Disputes
- California Franchise Tax Board – Address Change
- Claim My CA Property – Start Your Claim