Uses

• The Virginia State Bar allows state residents and attorneys, landlords and other financial professionals to use escrow accounts in a number of instances. In general, whenever a professional must hold money for a client, an escrow account is appropriate. However, this is not the case when an attorney holds money from which she will deduct fees or payments for herself. Money in an escrow account must be for the client's future use.
  
  

Account Requirements

• According to the Virginia State Bar, escrow accounts must conform to several regulations. They must be held by approved financial institutions that are insured by federal agencies and have filed paperwork with the Virginia State Bar to confirm their status. Escrow accounts must be trust accounts that earn interest, and the banks or institutions that hold them must be prepared to submit account records to the State Bar in the event of a lawsuit.
  
  

Records

• The process by which lawyers in Virginia keep records for the escrow accounts they use also falls under Virginia State Bar guidelines. Lawyers must keep records of all escrow transactions, including additional payments from a client once an escrow account is already open. They can also only disburse funds from an escrow account with written authorization from the client. A lawyer who uses an escrow account in Virginia must also be able to show a final balance of zero once the client's case is completed, with all funds accounted for through disbursement records.
  
  

Tenancy Law

• Virginia's tenancy laws include rules about escrow accounts for landlords. When landlords agree to accept advance rent, they must place it in federally insured escrow accounts until the rent due date, at which time landlords can withdraw the funds. In addition, when tenants have outstanding disputes with landlords and choose to withhold rent, they must place an amount of money equal to the cost of rent into an escrow account. Once the case is resolved, the money will go back to the tenant or pass on to the landlord if the tenant's complaint is not valid. This rule prevents tenants who can't afford rent or choose not to pay from creating disputes simply to avoid payment.