Choosing Your Escrow Agent in a Real Estate Deal: Lessons from Williamsbridge

In an earlier post on this site, When the Seller’s Lawyer Holds the Escrow Deposit, I discussed the risks that arise when one party’s attorney controls escrow funds that are supposed to remain neutral. A related lesson follows naturally: when lawyers hold the escrow deposit, the choice of your own lawyer becomes especially important if the deal is falling apart.

A 2017 Bronx County Supreme Court decision, 2125‑27 Williamsbridge LLC v. 2125 Williamsbridge Realty LLC, illustrates why. The dispute arose from a commercial real estate contract in which the seller’s attorney was designated as escrow agent for the purchaser’s down payment. The transaction did not close on schedule. Months later, additional funds were wired into the seller‑attorney’s escrow account, well after the stated closing deadlines. Eventually, the seller declared the contract expired, directed his attorney to return the escrow funds, and refused to close. It appears that the purchaser's attorney did nothing.

The purchaser sued both lawyers for breach of fiduciary duty, malpractice, fraud, and conspiracy. From the purchaser’s perspective in Williamsbridge, the return of escrow funds signaled that the seller had walked away and that its leverage was gone. The buyer expected its lawyer to resist that moment—by objecting, delaying release, or otherwise preserving pressure. Whether such steps were legally required was beside the point. To the client, advocacy meant fighting to keep the deal alive when it mattered most. The disappointment was compounded by optics. The purchaser’s attorney shared office space with the seller’s attorney.

The court however was clear: shared office space does not create a conflict, and ethical concerns alone do not establish malpractice. The purchaser also failed to allege facts showing that different conduct by its lawyer would have changed the outcome. Legally, the claims failed.

Williamsbridge underscores a broader point echoed in When the Seller’s Lawyer Holds the Escrow Deposit: escrow arrangements shape incentives, leverage, and client psychology long before litigation begins. When lawyers control the money, clients evaluate loyalty through outcomes, not legal doctrines. Buyers entering such transactions should choose counsel who not only understands escrow law, but who clearly explains what advocacy can—and cannot—look like when the deal starts to unravel.

Need a neutral escrow agent? Contact us by phone or email to see if we can help you.