How many authorized settlement procedures exist to resolve escrow disputes?

• A. 2
• B. 3
• C. 4
• D. 5

Answer: (C)

The number four reflects the four approved ways to resolve escrow disputes. When there’s a clash over who should receive escrow funds, these routes are provided as recognized, faster alternatives to immediate court action and help protect the funds involved.

First, mediation offers a no-adverse, facilitated conversation with a neutral mediator. The goal is for the parties to reach a voluntary agreement. If they do, the settlement is written and funds are disbursed accordingly.

Second, arbitration provides a more formal process where a neutral arbitrator (or panel) hears both sides and issues a decision. Depending on the agreement, that decision can be binding and enforceable.

Third, court action is available when the dispute cannot be settled through ADR. A civil action lets a judge determine the rightful entitlement to the funds and issue an order for disbursement.

Fourth, a written mutual agreement to disburse funds—often documented as a broker’s or parties’ settlement agreement—formalizes a resolution that the escrow holder can follow, ensuring a clear path to release.

These four options cover the common, authorized avenues to settle escrow disputes, keeping funds safeguarded while offering flexible, enforceable solutions.