The bill amends Section 82.158 of the Property Code to establish new regulations regarding the withdrawal of escrow deposits made in connection with the purchase or reservation of condominium units. It specifies that deposits must be held in escrow until certain conditions are met, such as closing or refunding to the purchaser. A significant addition is the provision that allows a declarant to withdraw escrow funds for construction costs if the contract stipulates this and the declarant maintains a surety bond or insurance. The bond or insurance must be sufficient to cover the amount of the deposit being withdrawn and must be payable to the purchaser if a judgment requires the return of the deposit.

Additionally, the bill clarifies that the party holding the escrow funds is not responsible for monitoring the construction progress or how the funds are spent by the declarant, thus limiting their liability. The new legal language includes provisions for the bond or insurance to be either individual or blanket policies, ensuring that all deposits received by the declarant are covered. The bill is set to take effect on September 1, 2025.

Statutes affected:
Introduced: Property Code 82.158 (Property Code 82)