Escrow with a lawyer or a notaire: what are the differences?
A lawyer and a notaire (French notary) can each receive funds in the capacity of escrow agent. The choice is not a matter of ranking one profession above the other, but of the nature of the transaction and the framework best suited to it.
Escrow with a notaire
The notaire (French notary) naturally comes in where an authenticated deed is required, in particular in ordinary property sales (asset deals). There, the escrow of the price is built into the notarial transaction, the funds being held within the framework of the firm's accounts.
Escrow entrusted to a lawyer
A lawyer is particularly suited to business transactions that do not necessarily require an authenticated deed: the sale of a business (fonds de commerce), the sale of securities, a property share deal (sale of partnership interests in an SCI), M&A, private equity, or escrow in the context of a dispute. The funds then pass through the CARPA account (the French bar's fund-handling body), which controls each handling, isolates them on a dedicated sub-account and ensures their traceability, all covered by professional confidentiality.
Two professions, two settlement funds
Each of the two professions has its own framework for handling funds. A lawyer handles funds through CARPA, the French bar's fund-handling body. A notaire (French notary) has an equivalent framework, specific to its profession. In both cases, clients' funds are ring-fenced, controlled and separate from the professional's own assets. The difference therefore lies less in the level of security than in the type of transaction for which each is naturally competent.
How to choose?
In practice, the structure of the transaction guides the choice. A property sale by authenticated deed calls for the notaire; a sale of company securities, a sale of a business (fonds de commerce) or an escrow linked to a transaction fall more naturally to the lawyer. In every case, the mission is the same: to hold the funds safely and only release them on the agreed conditions.
- Sale of a property by authenticated deed: the notaire (French notary);
- Sale of a business (fonds de commerce): the lawyer, within the framework of the escrow of the price;
- Sale of securities, property share deal (interests in an SCI): the lawyer;
- Escrow linked to a dispute or a settlement: the lawyer.
Fidens provides escrow for your business transactions on a CARPA account, under the responsibility of a lawyer.
Frequently asked questions
Is a lawyer as safe as a notaire for an escrow?+
Yes. A lawyer handles funds through CARPA, which controls each movement and isolates the sums on a dedicated sub-account. The funds are ring-fenced, traced and covered by professional confidentiality. The level of security is comparable; it is the nature of the transaction that guides the choice.
For a sale of partnership interests in an SCI, do you need a notaire?+
No, the sale of partnership interests can be completed by private agreement, without a notaire. The escrow of the price is then naturally entrusted to a lawyer, who holds the funds on the CARPA account until the agreed conditions are satisfied.
Can you choose your escrow agent freely?+
In a contractual escrow, yes: the parties freely designate the trusted third party. The choice usually falls on the professional best suited to the nature of the transaction.
A transaction to secure?
Fidens sets up the escrow of the price on a CARPA account, under the responsibility of a lawyer.