My house is baller tho, and the rent is 10k a week, for 520k a year.
So when we sign the lease, we agree that you pay 4 weeks into a bank account that youre not able to touch and I’m not able to touch either.
It’s only there because if something happens and you don’t pay me 10k each week, the account managers (escrow service) pays me 10k each week.
Once that happens, you’re contractually obligated to pay the account (escrow) back within X amount of time. That way if you miss more payments, the buffer is replaced. But since the buffer exists, legally you haven’t missed a payment until the fifth week you don’t pay me.
Musk has been coasting on that buffer. Now that he’s running out of buffer, legal consequences will start piling up.
What’s an escrow account? Your comment is very clear and I understand the gist of it but I don’t actually now what escrow means.
Let’s say you agree to rent my house
My house is baller tho, and the rent is 10k a week, for 520k a year.
So when we sign the lease, we agree that you pay 4 weeks into a bank account that youre not able to touch and I’m not able to touch either.
It’s only there because if something happens and you don’t pay me 10k each week, the account managers (escrow service) pays me 10k each week.
Once that happens, you’re contractually obligated to pay the account (escrow) back within X amount of time. That way if you miss more payments, the buffer is replaced. But since the buffer exists, legally you haven’t missed a payment until the fifth week you don’t pay me.
Musk has been coasting on that buffer. Now that he’s running out of buffer, legal consequences will start piling up.
Thank you!