What is escrow and how does it work?
In: Economics
Building construction sometimes have escrows with the township to ensure that the project isnt half finished if the contractor goes bankrupt. The township doesnt necessarily care if the new building gets completed, they care if the contractor digs a giant hole for the basement and then just leaves. The township escrows the money so that if the contractor gives up on the project, that the township can use that money to pay someone to come and clean up the site just enough where its safe to the public.
(Im missing some info but that’s the ELI5 version)
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