An escrow is a contractual arrangement in which a third party receives and disburses money or property for the primary transacting parties, with the disbursement dependent on conditions agreed to by the transacting parties.
South Africa Escrow Services
TradeSafe Escrow
Phone: 010 020 3101
EscrowEurope Software Escrow
Phone: 021 852 9365
Truzo (Pty) Ltd
Phone: 011 486 0692
Secure Escrow Services
Phone: 087 470 0118
Chattan Escrow
Phone: 011 214 5955
Hicrow
Phone: 083 277 1283
Europlaw Group Incorporated
Phone: 011 100 5034
What is an ‘escrow’?
Escrow is a Latin word meaning money, property, or a written bond, kept in the custody of a third party until a specified condition has been fulfilled. It is essentially a trust agreement, where the source code together with other information (deposit materials) is placed in trust with an ‘Escrow Agent’ who acts as a neutral party in the transaction.
What is a “Software Escrow”?
A Software Escrow provides for software source code and other materials to be placed in the custody or possession of a trusted third party and the deposit thereof into a secure and protected environment for the delivery to another party upon the fulfilment of certain specified conditions.
Source code is the software’s programming code represented in a particular programming language that humans can write and understand. Examples of programming languages include BASIC, C++, COBOL, Java, Pascal and Visual Basic.
When software is purchased, the purchaser generally receives only the object code of a program or application, together with a license to use it. When source code is compiled it is converted to object code, which is no longer readable by humans. Therefore, it is important to have a copy of the source code in escrow and not the object code, although, it is often good practise to store copies of both.
Software escrow is all about safeguarding software intellectual rights. Currently it is the ICT companies and the financial institutions that are utilising escrow services, as it is mainly, but not exclusively, these companies that undertake bespoke software development either directly or through the use of contractors.
Thus, there is a need for the larger corporates to protect themselves from the possibility of those smaller companies closing their doors, failing to deliver the required modifications etc; and the former then not having access to the relevant source code, object code and the relevant other components associated with the code, such as documentation, that had been produced for them by the latter.
Is there escrow in South Africa?
Escrow allows for a third-party, in this case Standard Bank, to collect the buyer’s money, which is then held in a bank managed account until all specified requirements and conditions agreed to between both parties are met.
How do escrow services work in South Africa?
Each month, the lender deposits the escrow portion of your mortgage payment into the account and pays your insurance premiums and real estate taxes when they are due. Your lender may require an “escrow cushion,” as allowed by state law, to cover unanticipated costs, such as a tax increase.
Why are escrow fees so expensive in South Africa?
If the escrow balance is insufficient to cover your costs (perhaps your taxes or insurance premiums have increased), the lender can require you to make up any shortage. Usually, you get to choose between paying a lump sum, or making up the shortage during the next year by paying a higher monthly escrow fee.
Do you pay interest on escrow in South Africa?
No, for the most part, a bank is not required to pay interest on any escrow accounts (also known as mortgage impound accounts) that it holds for its customers. Indeed, the U.S. Department of Housing and Urban Development (HUD) does not specify that escrowed money be held in interest-bearing accounts.