TX SB1407

Allows condominium developers (declarants) to withdraw buyer deposits from escrow once construction begins, if the purchase contract permits using the deposit for construction costs

Requires declarants to obtain and maintain a surety bond or insurance from a Texas-licensed insurer to cover the full amount of any deposit withdrawn from escrow

Limits withdrawn funds to use only for actual building and construction costs of the specific project where the purchased unit is located

Protects purchasers by requiring the bond or insurance to pay out if the purchaser obtains a final judgment requiring the declarant to return the deposit

Shields escrow holders (brokers, attorneys, title companies) from liability for releasing funds to declarants and eliminates their obligation to monitor construction progress or fund expenditures

Takes effect September 1, 2025