SB257 Alabama 2015 Session

Updated Feb 27, 2026

Notable

Summary

Primary Sponsor: Trip Pittman
Republican
Session: Regular Session 2015
Title: Uniform Condominium Act, define terms, required in state escrow agent, withdrawals limited, written notice required, Sec. 35-8A-410 am'd.
Summary: SB257 updates Alabama's Uniform Condominium Act to require in-state escrow, define key terms, allow letters of credit, and limit how deposits can be used for construction costs with required notices.
What This Bill Does
It defines terms like hard costs, qualified purchaser, and substantially completed. It requires deposits for condo purchases to be placed in Alabama escrow accounts held by approved entities and allows a letter of credit to replace part or all of a deposit. It lets the declarant withdraw deposits to pay hard costs under specific conditions, with limits and bond guarantees, and requires clear written notices and legends in purchase contracts and offering statements about how deposits may be used.

Who It Affects
Condominium buyers in Alabama, who gain clearer protections and notices about how their deposits may be used and when interest may be paid.
Developers/declarants and escrow agents, who must follow new in-state escrow rules, may use deposits for hard costs under bonds, and must include required legends in contracts and offering statements.

Key Provisions
Defines hard costs, qualified purchaser, and substantially completed for condo projects.
Escrow deposits must be held in-state by licensed title insurers, attorneys, licensed brokers, or insured institutions; funds generally earn interest for the rightful owner.
Declarant may accept a letter of credit in lieu of part or all of the deposit.
Deposits may be withdrawn for hard costs after certain conditions, including maintaining at least 10% deposit and/or posting a bond guaranteeing repayment; withdrawals limited to specified amounts and purposes.
If bond is used, the bond must name the purchaser as beneficiary and may be satisfied by blanket bonds; withdrawn funds may not bear interest unless contract says otherwise.
Contracts and offering statements must include legends notifying that deposits may be used for construction or hard costs; escrow accounts must be separately tracked per purchaser if multiple accounts are used.
The bill becomes law after the governor signs and it takes effect in the first day of the third month following passage.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Condominiums