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TennesseeSB 1079114th General Assembly (2025-2026)SenateWALLET

AN ACT to amend Tennessee Code Annotated, Title 66, relative to the use of escrow funds for condominium projects.

Sponsored By: Jack Johnson (Republican)

Became Law

Real Property

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Bill Overview

Analyzed Economic Effects

3 provisions identified: 1 benefits, 1 costs, 1 mixed.

Stronger escrow protection for condo buyers

Beginning July 1, 2025, for contracts signed or amended on or after that date, up to the first 10% of the price is held in a Tennessee escrow by an approved agent at an insured institution. After construction starts and before it is finished, the developer can draw only to pay actual construction costs and only with a surety bond or an irrevocable letter of credit equal to the deposit. The escrow or security stays in place until closing, buyer default, a refund, payment into court, or a final court order. Actual costs include materials and labor, demolition and site work, permits and impact fees, utility reservations, and design and surveying fees, including related easements.

Using deposits above 10% needs consent

Beginning July 1, 2025, if construction has started, any deposit above 10% may be kept in a separate escrow and used for building costs only if your contract allows it. Those funds cannot pay salaries, commissions, broker expenses, or advertising. The contract must show a bold or all-caps notice on the first page and you must initial it. This applies to contracts signed or amended on or after July 1, 2025.

Lender liability for condo deposits limited

Beginning July 1, 2025, lenders are not responsible for how condo deposits are used or returned. If a lender takes control of the project by foreclosure or another remedy, it is only liable for deposits not already disbursed and spent. This applies to contracts signed or amended on or after July 1, 2025.

Sponsors & Cosponsors

Sponsor

  • Jack Johnson

    Republican • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 121 • No: 13

House vote • 3/27/2025

FLOOR VOTE: REGULAR CALENDAR PASSAGE ON THIRD CONSIDERATION 3/27/2025

Yes: 85 • No: 10

Senate vote • 3/3/2025

FLOOR VOTE: as Amended Third Consideration 3/3/2025

Yes: 28 • No: 3

Senate vote • 2/25/2025

SENATE COMMERCE AND LABOR COMMITTEE

Yes: 8 • No: 0

Actions Timeline

  1. Pub. Ch. 180

    4/30/2025

  2. Effective date(s) 07/01/2025

    4/30/2025

  3. Signed by Governor.

    4/11/2025Senate

  4. Signed by H. Speaker

    4/2/2025House

  5. Transmitted to Governor for action.

    4/2/2025Senate

  6. Signed by Senate Speaker

    4/1/2025Senate

  7. Enrolled and ready for signatures

    3/28/2025Senate

  8. Subst. for comp. HB.

    3/27/2025House

  9. Am. withdrawn. (Amendment 1 - HA0046)

    3/27/2025House

  10. Passed H., Ayes 85, Nays 10, PNV 0

    3/27/2025House

  11. Rcvd. from S., held on H. desk.

    3/6/2025House

  12. Senate adopted Amendment (Amendment 1 - SA0029)

    3/3/2025Senate

  13. Passed Senate as amended, Ayes 28, Nays 3

    3/3/2025Senate

  14. Engrossed; ready for transmission to House

    3/3/2025Senate

  15. Placed on Senate Regular Calendar for 3/3/2025

    2/27/2025Senate

  16. Recommended for passage with amendment/s, refer to Senate Calendar Committee Ayes 8, Nays 0 PNV 0

    2/25/2025Senate

  17. Placed on Senate Commerce and Labor Committee calendar for 2/25/2025

    2/18/2025Senate

  18. Passed on Second Consideration, refer to Senate Commerce and Labor Committee

    2/12/2025Senate

  19. Introduced, Passed on First Consideration

    2/10/2025Senate

  20. Filed for introduction

    2/5/2025Senate

Bill Text

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