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Tripartite Escrow Agreement fee is
only 1½% of the
contract amount.
*Bid,
Payment and Performance Bonds cost is
3% to 4% of the total
contract amount.
Escrow fee for a completed IRS §1031
exchange is 1½% of escrow funds.
WHY USE ESCROWS?
If you are a small-sized contractor and ineligible for bonding, you are often
unable to submit proposals or offers to Federal Government agencies or
departments. This not only shuts you out of the competition, but also denies the
government the benefits of working with smaller companies, that offer more
individualized attention, quicker response time and lower costs.
Congress passed the Federal Acquisition Streamlining
Act of 1994, Public Law 103-355 approved
Tripartite Escrow Agreements for contracts up to $100,000. For more information on this Act
click here.
This law created Tripartite Escrow Agreements to increase the business
opportunities among small-sized contractors, while presenting the government
with more available contractors.
PAYMENT
PROTECTION OPTIONS
A contractor now has five (5) alternative payment protection options, per Federal Acquisition Regulation Part 28 Section 102, (for more information on FAR
§28.102,
click
here), and Defense Federal
Acquisition Regulation Part 52 Section 228-13, (for more information on DFAR §52.228-13,
click
here), the options are:
1. An irrevocable letter of credit.
2. A certificate of deposit.
3. Other deposits for the type of security listed in
FAR 28.204-1
and
FAR 28.204-2.
OPTION
#4
Tripartite Escrow Agreement
There is a better
choice. Pursuant to the regulations FAR §28.102
and the DFAR §52.228-13 the Government authorizes Tripartite Escrow Agreements
in lieu of
payment bonds, and other indicated payment protection alternatives. To utilize
the Tripartite Escrow Agreement the fee is only 1½% of the contract.
With the Tripartite Escrow Agreement no credit report, financial statements, tax
returns, working capital or work experience are needed to be approved. If you
have a Tripartite Escrow Agreement as an option in your solicitation, you can
save money and time, and the financial restrictions of an irrevocable letter of credit or certificate of deposit,
(for more information,
click
here).
OPTION #5
Payment or Performance Bonds
If a
Tripartite Escrow Agreement is not suitable and a Payment Bond and/or
Performance Bond is the only acceptable payment protection for a contract,
Tripartite Escrow Corporation also offers via an individual surety such a
bond and escrow fees combined the entire cost is *3% to 4% of the total
contract amount. An individual surety can
provide
Bid Bond, Payment Bond and/or Performance Bond of up to $4,000,000,
(for more information,
click
here).
We are a
qualified intermediary, facilitator and accommodator
for the IRS §1031 Exchange. An IRS §1031 Exchange is also
known as a Tax-Deferred Exchange, Like-Kind Exchange, Real
Estate Exchange or Starker Exchange.
The security of your funds is of the
utmost importance to us, and is not
something you should have to worry about
while completing your §1031 Exchange. Here's
what we can do for you,
(for more information,
click here).
Participating companies for §1031
Exchange:
1. The bank where client funds are deposited
(California Bank and Trust).
2. The qualified intermediary (Tripartite
Escrow Corporation).
1) The Bank:
Although California Bank and
Trust is financially strong and very well
capitalized the only real safety for bank
accounts today is "FDIC" (Federal Deposit
Insurance Corporation).
California Bank and Trust possesses the
FDIC's Transaction Account Guarantee Program
and all its escrow accounts are FDIC
insured. Coverage is $250,000 for each
account.
2)
The Qualified Intermediary:
For the ultimate protection of funds is an
Escrow Agreement. This is a separately
signed agreement between the exchanger
(you), Tripartite Escrow Corporation, and
California Bank and Trust, which requires
your written approval of any withdrawal
of the §1031 funds. At the same time,
California Bank and Trust maintains control
of the §1031 funds, thereby meeting the
IRS's §1031 requirements.
Note:
The Escrow Agreement is signed by all
parties at the time of closing of the
relinquished property. When the §1031 funds
are wired into the escrow account,
California Bank and Trust places a hold on
the account. Thereafter, when the exchanger
is ready to close on the replacement
property, a Payment Authorization Form is
signed by you, authorizing the bank to
release the specified amount from the escrow
account, as requested by Tripartite Escrow
Corporation. Quite simply, the exchanger
will have to authorize any use of
their 1031 funds. The escrow service fee
for a completed exchange is 1½% of the total
amount of funds held in the escrow account.
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*Performance
and Payment Bonds for both the bond and escrow fees combined the entire cost is
*3% to 4% of the total contract amount. Additional
information and conditions for bonding will be required. Issuance of the
bonds is subject to the normal underwriting requirements upon bond
request.
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