Legal protection · 3 min read
Pre-construction deposits in Miami: how Florida law protects you
In Florida, the deposits you pay for a pre-construction condo go into an escrow account. The first 10% of the price stays protected there until closing. Anything you pay above 10% can only be used for construction if the contract allows it and construction has already started. The reservation made before the contract is refundable whenever you request it in writing.
One key question for any Latin American investor is simple: "What happens to my money while they build?" The answer is in Chapter 718 of the Florida Statutes, which governs condominiums.
What the law says about your deposits
Florida Statute 718.202 requires the developer to place in escrow every payment it receives before the building is completed, and to give you a receipt.
- Up to 10% of the price: stays in escrow.
- Above 10%: goes into a special account, and the developer can only withdraw it if the contract says so and construction has already begun.
- What it can be spent on: only actual construction and development costs, such as permits, demolition or architect and engineer fees. The law prohibits using that money for sales commissions, advertising, loan costs or legal fees.
If the contract allows the use of deposits above 10%, it must say so in conspicuous type on the first page, right above your signature.
A reservation and a contract are different things
| Reservation | Purchase contract | |
|---|---|---|
| What it is | You hold a unit before signing | A commitment to buy from the developer |
| Is it refundable? | Yes, in full and right away if you request it in writing | Only within the 15-day cancellation right or in the cases set out in the contract |
| Rule | Florida Statute 718.202(6) | Florida Statutes 718.202 and 718.503 |
Your 15-day cancellation right
Florida Statute 718.503 requires the contract to state, in conspicuous type, that you can cancel it in writing within 15 days after signing and after receiving all the documents. If the developer changes the offering in a way that hurts you, you get another 15 days from the day you receive that change. Waiving this right in the contract has no effect.
What to review before you sign
- The deposit schedule. In South Florida, deposits usually add up to between 20% and 50% of the price, according to Haute Living.
- The clause on using deposits above 10%. If it is there, that money may already be invested in construction.
- The escrow agent: who it is and how you will receive your receipts.
- The rental rules in the declaration of condominium.
We recommend going over these points with a Florida attorney. We walk through the documents with you and point out what is worth asking.
Frequently asked questions
Is my deposit safe if the developer goes bankrupt? The first 10% stays in escrow and the law limits how the rest can be used. The level of risk depends on what your contract says and how far along construction is, which is why we prefer developers with delivered projects.
How much do I have to deposit in total? It depends on the project. We show you the exact schedule for each building on the video call.
Can I sell my contract before delivery? Some contracts allow it under certain conditions (assignment). It is something we review case by case.
Sources
- Florida Statute 718.202
- Florida Statute 718.202 on Justia (permitted uses of deposits)
- Florida Statute 718.503
- Haute Living: pre-construction deposits in South Florida (May 2026)
This content is for informational purposes only and does not replace advice from a Florida-licensed attorney.
