89R8904 JBD-D
By: Lambert H.B. No. 4876
A BILL TO BE ENTITLED
AN ACT
relating to the withdrawal of certain deposits placed in escrow in
connection with the purchase or reservation of a condominium unit.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 82.158, Property Code, is amended to
read as follows:
Sec. 82.158. ESCROW OF DEPOSITS. (a) Except as provided by
Subsection (b), a [A] deposit made in connection with the purchase
or reservation of a unit from a declarant shall be placed in escrow
and held in this state in an account designated for that purpose by
a real estate broker, an attorney, a title insurance company
licensed in this state, an independent bonded escrow company, or an
institution whose accounts are insured by a governmental agency or
instrumentality until delivered to the declarant at closing,
delivered to the declarant because of the purchaser's default under
a contract to purchase the unit, or refunded to the purchaser.
Escrow deposits may be placed in interest-bearing accounts, and the
interest is payable as may be agreed in writing between the
declarant and the purchaser.
(b) If a contract to purchase a unit provides that the
deposit made in connection with the purchase or reservation of the
unit may be used for construction costs and the declarant obtains
and maintains a surety bond or insurance as described by Subsection
(c), the declarant may withdraw escrow funds when construction of
improvements begins. The funds may be used only for actual building
and construction costs of the project in which the unit is located.
(c) The bond or insurance required under Subsection (b) must
be issued by an insurer licensed in this state in favor of the
purchaser in an amount adequate to cover the amount of the deposit
to be withdrawn from escrow funds under Subsection (b). The
declarant may not withdraw an amount from the escrow funds greater
than the face amount of the bond or the insurance coverage amount.
The bond or insurance must be payable to the purchaser if the
purchaser obtains a final judgment against the declarant requiring
the declarant to return the deposit under the purchase agreement.
The bond or insurance may be either in the form of an individual
bond or policy for each deposit accepted by the declarant or in the
form of a blanket bond or policy assuring the return of all deposits
received by the declarant.
(d) The party holding escrow funds who releases any portion
of the funds to the declarant has no obligation to monitor the
progress of construction or the expenditure of the funds by the
declarant and is not liable to any purchaser for the release of
funds under this section.
SECTION 2. This Act takes effect September 1, 2025.