H.B. No. 4876 amends Section 82.158 of the Property Code to clarify the conditions under which deposits made for the purchase or reservation of condominium units can be withdrawn from escrow. The bill stipulates that deposits must be held in escrow until certain conditions are met, such as the closing of the sale, the purchaser's default, or the declarant's default. Notably, it allows for the withdrawal of escrow funds by the declarant if the contract explicitly states that the deposit may be used for actual development and construction costs, provided the declarant maintains a surety bond or insurance to protect the purchaser's interests.

The bill further defines what constitutes "actual development and construction costs," specifying allowable expenditures and explicitly excluding costs related to sales, marketing, and financing. It also establishes that any funds withdrawn for development must be credited against the purchase price or returned to the purchaser if the declarant defaults. Additionally, the bill outlines the requirements for the bond or insurance that must be in place to cover the amount withdrawn from escrow, ensuring that the purchaser is protected in the event of a dispute. The provisions of this act will take effect on September 1, 2025.

Statutes affected:
Introduced: Property Code 82.158 (Property Code 82)
House Committee Report: Property Code 82.158 (Property Code 82)