Relating to the withdrawal of certain deposits placed in escrow in connection with the purchase or reservation of a condominium unit.

SB 1407 allows condo developers to withdraw escrow deposits early for construction costs, but only if they provide a bond or insurance policy covering the full deposit amount. This protects buyers by requiring the bond (issued by a Texas-licensed insurer) to pay refunds directly to buyers if developers fail to return deposits under the purchase agreement. The bond must cover the exact deposit amount and can be either individual or a blanket policy for all deposits. The bill applies to deposits made under condo purchase contracts and takes effect September 1, 2025.