Who is required to maintain an escrow account?

An escrow account is a financial account where funds are held by a third party on behalf of the buyer and seller in a transaction. In the context of auctioneering in Georgia, both auctioneers and auction companies are required to maintain an escrow account to handle the funds collected from buyers and sellers.

Having an escrow account is crucial because it ensures that any funds received during the auction process are kept separate from the auctioneer's or auction company's operating funds. This separation helps to protect the funds, ensuring they are used only for the intended purpose, such as paying sellers, and preventing any potential misuse. It also provides a level of transparency and security for all parties involved in the auction process, which is essential in building trust.

While auctioneers operate independently, and auction companies act as the business entity that may employ multiple auctioneers, both have an obligation to manage funds responsibly. Thus, the requirement for an escrow account applies to both parties in order to comply with legal standards and ethical practices in the industry.