HB189 Summary

• Amends Alabama Uniform Condominium Act Section 35-8A-410 to require escrow agents holding condominium purchase deposits be located within the state.

• Allows declarants to accept letters of credit in lieu of a portion or all of the deposit.

• Permits declarants to withdraw deposits exceeding 10 percent of purchase price for hard costs (construction materials, labor, site preparation) if the cancellation period expires and construction is incomplete, provided at least 10 percent remains on deposit or a surety bond is posted.

• Restricts withdrawn funds from use for salaries, commissions, sales expenses, or advertising; prohibits interest accrual on withdrawn funds if contract specifies.

• Requires contracts to include conspicuous written notice stating "DEPOSITS MAY BE USED BY DECLARANT FOR HARD COSTS INCURRED IN THE ACTUAL BUILDING AND CONSTRUCTION OF THE CONDOMINIUM PROJECT" and defines key terms including "qualified purchaser" (income and net worth thresholds) and "substantially completed."