Purchase
by Brandauer RA
DE EN BKS
Menü
Focus area · Property purchase

Escrow & purchase-price handling.

The purchase price is the most delicate moment of a property purchase. Through an attorney or notary escrow account the money only flows once the unencumbered acquisition of ownership is secured, which protects buyer and seller alike.

BRANDAUER Rechtsanwälte
Your law firm

BRANDAUER Rechtsanwälte

Salzburg law firm for real estate, property and corporate law

Every matter is handled by a coordinated team of lawyers, legal staff and specialists. In property purchase matters we look at the contract, land register, escrow and tax consequences together.

Call directly +43 662 6280000 WhatsApp Send email Book initial consultation (72 euros)

A property purchase brings two risks together: the buyer should only pay once they receive unencumbered ownership, while the seller should only transfer ownership once the purchase price is secured. Attorney or notary escrow resolves this conflict by having a neutral party representative hold the purchase price in a separate trust account and release it only against fulfilment of the agreed conditions.

The buyer therefore does not transfer the purchase price directly to the seller, but into the escrow account. Payout only follows once the discharge of encumbrances is secured, the declaration of consent to registration is in place and registration of ownership in the agreed priority rank appears guaranteed. Until then the amount is beyond the reach of either side and is safeguarded through the trust institution of the bar association.

This page explains the course of the purchase-price handling, the typical payout conditions and the tasks of the escrow agent. The guide below helps you assess your starting position, but does not replace an examination of the individual case.

Assess your handling

How is your purchase-price handling set up?

Answer one or two questions about escrow and the encumbrance of the property. You will receive a first, non-binding assessment of your starting position.

Already know you want to get in touch? Go straight to the enquiry form.

01 Question 1

Should the purchase price go directly to the seller or through an escrow account?

In escrow handling the buyer does not pay the purchase price to the seller, but into a separate trust account held by the party representative. Payout only follows once the agreed conditions are met.

All paths at a glance

Overview of all answers.

01

Without escrow the buyer bears the full advance-performance risk. Escrow handling protects both sides.

If the buyer pays the purchase price directly to the seller, they perform in advance without the unencumbered acquisition of ownership being secured. If registration fails or charges remain, the capital invested is at risk. Conversely, the seller may hand over the property without having the purchase price secured.

Attorney or notary escrow resolves this tension: the purchase price sits secured with the escrow agent and is only paid out against fulfilment of the agreed conditions. Have the handling structured early.

02

For an encumbered property the discharge of encumbrances secures your unencumbered acquisition of ownership.

Where mortgages or other charges exist, the escrow agent obtains the release declarations from the creditor banks before payout. The purchase price is used so that the open claims are covered and the charges to be deleted are removed. Only once the discharge of encumbrances is secured and the registration of ownership in the agreed priority rank appears guaranteed does payout follow.

This way the buyer pays only against the safeguarding of an unencumbered acquisition, while the seller knows the purchase price is secured with the escrow agent. The exact sequence of steps should be set out in the escrow agreement.

03

Even for an unencumbered property, secured registration in the priority rank is decisive.

If the property is already free of encumbrances, the focus shifts to the secured registration of the buyer's ownership. The escrow agent only pays out once the declaration of consent to registration is in place and registration in the agreed priority rank is guaranteed. A note of priority rank can safeguard the buyer's rank.

The escrow account can also be used to settle real-estate transfer tax and the registration fee and to handle any self-assessment by the party representative. This keeps the entire process in one hand.

The process at a glance

From deposit to payout of the purchase price

The purchase-price handling follows a fixed sequence. The purchase price sits secured with the escrow agent and is only released once the individual conditions are met. The overview shows the steps and their effect.

Course of escrow-based purchase-price handling in a property purchase
Step What happens Effect for buyer & seller
Step 1 Deposit into the escrow account The buyer transfers the purchase price into the agent's separate trust account The buyer does not pay the seller directly; the amount sits secured
Step 2 Discharge of encumbrances The escrow agent obtains the release declarations from the creditor banks The buyer acquires unencumbered ownership; open charges are covered
Step 3 Consent and priority rank The declaration of consent is in place; the agreed priority rank is secured Registration of the buyer's ownership is safeguarded
Step 4 Taxes and fees Real-estate transfer tax and the registration fee are settled via the account Both sides have the financial handling in one hand
Step 5 Payout to the seller Payout only follows once all conditions are met The seller receives the purchase price, the buyer secured ownership

The exact sequence and the individual payout conditions are set out in the escrow agreement and depend on the specific property. The table offers an overview and does not replace an examination of the individual case.

The trust account as a secure place of safekeeping

In escrow handling the party representative holds the purchase price in a separate trust account that is strictly separated from their own assets. The escrow agent owes both sides handling in accordance with instructions and impartiality, and releases the amount only once the agreed conditions are met.

Where the escrow is run through the trust institution of the bar association and the electronic trust register, there is additional insurance cover under the general conditions for trust-based handling. This noticeably increases security for buyer and seller.

The payout conditions in detail

The purchase price is only paid out once the buyer's unencumbered acquisition of ownership is secured. This typically includes the discharge of encumbrances through release declarations from the creditor banks, the presence of the declaration of consent to registration and the safeguarding of the agreed priority rank for registration.

Only once the secured registration of ownership in this priority rank appears guaranteed does the escrow agent release the amount. The buyer thus pays only against the safeguarding of their acquisition, while the seller already knows the purchase price is secured with the escrow agent. The conditions are set out specifically in the escrow agreement.

Maturity, deadlines and taxes

When the buyer has to deposit the purchase price depends on the agreed purchase-price maturity. Often the deposit is tied to the signed deeds being in place or to the note of priority rank. If payment deadlines are missed, consequences of default such as default interest may arise.

The taxes connected with the acquisition can also be settled through the escrow account, such as real-estate transfer tax and the registration fee. The party representative can take over the self-assessment and pay the taxes from the trust deposit, so that the entire financial handling stays in one hand.

This page offers a general overview of the Austrian legal position (legal status June 2026) and does not replace advice in an individual case. The specific payout conditions depend on the particular property and the escrow agreement.

Frequent questions

Escrow and purchase-price handling.

Why should I not pay the purchase price directly to the seller? +

With a direct payment you perform in advance without the unencumbered acquisition of ownership being secured. Through an escrow account, by contrast, the purchase price only flows to the seller once the discharge of encumbrances is secured and registration of your ownership in the agreed priority rank appears guaranteed. This protects buyer and seller alike.

Who can act as an escrow agent? +

Escrow is usually handled by an attorney or a notary as party representative. Where the handling is run through the trust institution of the bar association and the electronic trust register, there is additional insurance cover under the general conditions for trust-based handling.

What does discharge of encumbrances mean? +

Discharge of encumbrances means that mortgages or other charges registered in the land register are dealt with so that you acquire unencumbered ownership. Before payout the escrow agent obtains the release declarations from the creditor banks for this purpose and uses the purchase price so that the open claims are covered and the charges are deleted.

When is the purchase price paid out to the seller? +

Payout only follows once all the conditions agreed in the escrow agreement are met: typically secured discharge of encumbrances, the presence of the declaration of consent and guaranteed registration of ownership in the agreed priority rank. Until then the amount remains beyond the reach of either side.

In depth

Terms for this focus area

Escrow agent

Tasks, duties and liability of the party representative in the trust-based handling of the purchase price.

Purchase-price maturity

When the purchase price has to be deposited, what conditions maturity is tied to and which consequences of default may arise.

Discharge of encumbrances

How release declarations from the creditor banks secure the buyer's unencumbered acquisition of ownership.
Related topics

This might also affect you.

Purchase contract review

Review the property purchase contract before signing: clauses, purchase price, registration clause, rights of withdrawal and hidden risks.

Land register and encumbrances

Land register status, registration of ownership, easements, mortgages and real burdens. Securing priority and deleting encumbrances.

Handover and possession

Handover, passing of risk, transfer of possession, the handover protocol and benefits and burdens from the effective date.

Handle the purchase price securely?

We structure the escrow handling from deposit to payout. Call us directly or write to us, with a callback within one business day.

+43 662 6280000 [email protected] Book initial consultation (72 euros)
Contact

A direct line to the firm.

Address

BRANDAUER Rechtsanwälte GmbH Giselakai 51 5020 Salzburg