The trust account may require additional authorizations that may slow down deliveries. If the trust account is managed by the title company, it may take additional time before it is paid. To establish this fiduciary relationship with Agent Bau-Escrow, the owner of the real estate and Agent Escrow must sign a fiduciary agreement. This document clearly identifies the procedures that the fiduciary agent must follow and authorizes the agent to make payments to the contractor, provided that the construction management documents are correct. The owner finances the account for the amount of the contract and the bank or title company will release the funds in accordance with the owner`s instructions. Using fiduciary accounts for large projects is a way to ensure that funds are available before work begins and can be used when the financial status of the project owner is questionable. Every project starts with funding – and some projects are funded by construction trust accounts. These accounts are often opened by the lending institution to help distribute funds over the course of a project. Article 2 Indicates who the fiduciary agent pays is an agent (prime contractor or subcontractor) Since the fiduciary account manager often controls the funds and strives to ensure that the account is only used for completed project work, they have higher documentation requirements. If you are not the GC and you see the cheques on an account called a « trust account », you may not see that one of them is being used in your project.
Overall, these accounts have no impact on the flow of money from a construction project, so lower-level contractors and suppliers may not notice the difference. Trust accounts are usually found in funded projects, but they could really be used for each construction project to provide additional oversight of project funds and as a guarantee that the owner has the money to fund the project. In essence, this document describes the officer`s responsibility to ensure that the project is accurately funded. As part of the agreement, this agent must benefit from an exemption from the pledge of any contractor and materialman who wishes to obtain payment. This waiver is essentially a written statement by the Contractor that the work requiring payment has been completed and that no further amount is due at the time of such payment. . . .