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Builders seek ability to use buyer‑paid upgrade funds before closing; Attorney General urges protections for consumers
Summary
Senate Bill 26 would clarify that funds buyers pay for upgrades and personalized items may be paid directly to builders and used in construction without being held in escrow; the Attorney General’s office urged amendments to protect consumers if projects fail.
Senate Bill 26 would permit buyers’ funds paid for upgrades and luxury items to be paid directly to builders and used during construction rather than being held in escrow under the Attorney General’s current interpretation of statute for certain subdivisions and condominium projects.
Sponsor Sen. Howard Pearl said recent Attorney General guidance reclassified buyer upgrade funds as deposits requiring escrow in subdivisions with 10+ condominiums or 15+ single family homes, producing higher costs, carry burdens for builders and, in some cases, constrained buyer…
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