TX HB4876

Allows condominium declarants (developers) to withdraw buyer deposits from escrow to use for actual development and construction costs once construction begins, if the purchase contract explicitly discloses this provision in bold or underlined type

Requires declarants withdrawing escrow funds to obtain and maintain a surety bond or insurance policy from a Texas-licensed insurer covering the full deposit amount, payable to the purchaser if they obtain a final judgment requiring return of the deposit

Defines allowable "actual development and construction costs" to include demolition, site clearing, permit fees, impact fees, utility fees, and professional fees (architectural, engineering, surveying) directly related to construction

Prohibits use of withdrawn escrow funds for sales commissions, advertising, marketing, loan fees, principal/interest payments, attorney fees, accounting fees, or insurance costs

Releases escrow holders from liability for monitoring construction progress or how declarants spend withdrawn funds, effective September 1, 2025