SB1462

Encourage condo construction by allowing escrow funds to be used for construction

State: California

Status: Failed ❌

Formal Title: An act to add Sections 11013.7 and 11013.8 to the Business and Professions Code, relating to subdivisions.

Summary: Allows for the early disbursement of a purchaser's deposit held in escrow for lots or parcels within a subdivision to cover project construction costs, including various fees and expenses associated with the project's development. Specifies conditions under which these funds can be released prior to closing, including requirements for project budget submission, recording of the project's declaration and bylaws, and proof of sufficient funds to complete the project. Additionally, mandates the Department of Real Estate to complete reviews within 30 days regarding the disbursement of these funds and requires developers to prominently display notices in their public reports if purchaser's deposits will be disbursed before closing.

Main sponsors: Steve Glazer

Legislative text: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SB1462