§ 4-110.

401 words·~2 min read·/vt/4-110-2

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

§ 4-110. Escrow of deposits

(a)Except as provided in subsection

(b)of this section, any deposit made in connection with the purchase or reservation of a unit from a person required to deliver a public offering statement pursuant to subsection 4-102(c) of this title shall be placed in escrow and held either in this State or in the state where the unit is located in an account designated solely for that purpose by a licensed real estate broker, an attorney licensed in that state, or a banking institution the accounts of which are insured by an agency or instrumentality of the government until the deposit is:

(1)delivered to the declarant at closing;

(2)delivered to the declarant after the purchaser’s default under a contract to purchase; or

(3)refunded to the purchaser.

(b)(1) If the agreement for purchase or reservation of a unit provides that deposit funds may be used for construction costs, the declarant obtains and maintains a surety bond as required by this subsection, and the declarant provides the purchaser with a copy of the surety bond under which the purchaser’s deposit is protected, the declarant may withdraw escrow funds for purposes of construction. The funds shall only be used for actual building and construction costs of the project in which the unit is located.

(2)The bond shall be issued by a surety authorized to do business in the State of Vermont in favor of the purchaser in an amount adequate to cover the amount of the deposit to be withdrawn. The declarant shall not withdraw more than the face amount of the bond. The bond shall be payable to the purchaser if the purchaser obtains a determination by the issuer of the surety bond that a claim is payable to the purchaser under the terms of the bond, which shall be consistent with the terms of the agreement for purchase or reservation, or a final judgment against the declarant requiring the declarant to return the deposit pursuant to the agreement for purchase or reservation. The bond may be either in the form of an individual bond for each deposit accepted by the declarant or in the form of a blanket bond assuring the return of all deposits received by the declarant. (Added 1997, No. 104 (Adj. Sess.), § 3, eff. Jan. 1, 1999; amended 2023, No. 96 (Adj. Sess.), § 1, eff. April 29, 2024.)