SB257 Summary

• Requires escrow agents holding condominium purchase deposits to be located in Alabama, and permits declarants to accept letters of credit in lieu of a portion or all of the deposit.

• Defines "hard costs" as actual building and construction expenses (site preparation, materials, systems, fixtures) excluding financing, professional fees, sales compensation, and marketing costs.

• Defines "qualified purchaser" as an individual or entity with annual income exceeding $200,000 (or $300,000 joint) or net worth exceeding $1,000,000.

• Allows declarants to withdraw deposits exceeding 10 percent of purchase price for hard costs if: cancellation period has expired, contract authorizes withdrawal, declarant owns land interest, and purchaser is qualified; alternately, a bond may be posted to withdraw the full deposit amount.

• Requires purchase contracts and offering statements to include boldfaced notice stating "DEPOSITS MAY BE USED BY DECLARANT FOR HARD COSTS INCURRED IN THE ACTUAL BUILDING AND CONSTRUCTION OF THE CONDOMINIUM PROJECT PURSUANT TO SECTION 35-8A-410, CODE OF ALABAMA 1975."