Vermont § 4-110 - Escrow of deposits

§ 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  to be withdrawn.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.)