What is a key requirement of Hawaii's Good Funds Act?

A key requirement of Hawaii's Good Funds Act is that escrow cannot close until all checks have cleared. This regulation is designed to protect all parties involved in a real estate transaction by ensuring that the funds used are valid and secure before any transfer of ownership occurs. The act mitigates risks related to insufficient or bounced checks, which could jeopardize the transaction or cause financial loss to the parties involved.

This requirement is significant because it establishes a standard for financial integrity in property transfers, promoting trust in the real estate transaction process. Escrow agents are tasked with verifying that all funds are available and have cleared before completing the closing process, which helps ensure that all parties fulfill their financial obligations in the transaction.

Understanding this aspect of the Good Funds Act is crucial for real estate professionals in Hawaii to ensure compliance and protect their clients' interests throughout the buying or selling process.