The proposed legislation, General Assembly Raised Bill No. 7027, aims to allow the use of condominium deposits for construction and development purposes. It amends Section 47-271 of the general statutes to define "actual costs" related to condominium development, which includes expenses such as demolition, site clearing, and construction costs, while explicitly excluding sales and marketing costs. The bill also modifies the conditions under which deposits made for the purchase of condominium units can be released from escrow. Specifically, it introduces a new provision allowing deposits to be used for construction improvements, in addition to the existing conditions of being returned to the purchaser or delivered to the declarant due to default.

Furthermore, the bill stipulates that any purchase agreement permitting the use of earnest money deposits must include a clear statement informing buyers that any payment exceeding one percent of the purchase price may be utilized for actual construction costs. It also updates the requirements for disclosures related to escrow accounts, ensuring that buyers are aware of the potential for their deposits to be withdrawn for authorized purposes. The changes are set to take effect on July 1, 2025, and aim to facilitate condominium development while providing transparency to purchasers regarding the handling of their deposits.

Statutes affected:
Raised Bill: 47-271