Stale checks in your escrow account, and how to clear them

By Bryan W. Colbert, 26 years in title insurance and escrow · Published · Updated

Short answer: A stale escrow check is still owed to its payee. Confirm it is truly outstanding, contact the payee, void and reissue if it was lost, and if the payee cannot be found follow your state’s unclaimed property rules. Document each step. ALTA Best Practices v5.0 requires management approval of activity on balances older than six months.

An escrow check that has not cleared still belongs to someone. Until it clears, is voided and reissued, or is turned over to the state as unclaimed property, it sits on your outstanding list and in your reconciliation.

Why they matter

  • Every outstanding check is money the account still owes. The older it gets, the harder the payee is to reach.
  • ALTA Best Practices Pillar 2 says "Balances older than six months require management approval of activity." (ALTA Best Practices v5.0)
  • After a period set by state law, an uncashed check is presumed abandoned and becomes unclaimed property the agency must report.

The steps that clear one

  1. Confirm the check is genuinely outstanding: not cleared under a different amount, not a duplicate entry.
  2. Contact the payee. Ask whether they received it and whether they still have it.
  3. If it was lost or never received, void it and reissue from the same file.
  4. If the payee cannot be reached, follow your state’s unclaimed property rules for that item.
  5. Document each step in the file, with dates.

How AER helps

In the monthly AER Compliance Portal, each open item that crosses its category’s age threshold is listed with the standard corrective step for its category and the date AER first identified it, carried month to month until it clears. Old checks are visible while there is still time to reach the payee.

Escrow reconciliation services · Negative File Balances · Free Snapshot

Questions

How old is a stale check?

There is no single number. Banks may decline to honor a check after six months, Pillar 2 asks for management approval of balances older than six months, and state dormancy periods for unclaimed property run years. Use the shortest one that applies to you as your working limit.

Can I just write it off?

No. The money belongs to the payee. It is either paid, reissued, or reported to the state.

This page is general information, not legal advice.

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