Buying Pre-Construction in South Florida: Deposit Schedule, Timelines, and What Buyers Need to Know
From the first reservation to the final closing, understand the financial commitments, milestones, documents, and potential changes involved in purchasing a South Florida new development.
Buying a residence before it is completed can give a purchaser access to a new building, contemporary finishes, desirable views, and the opportunity to select a home years before move-in. Across South Florida, buyers may encounter developments that are still in planning, newly launched, under construction, or approaching completion.
The process is exciting—but it is not the same as purchasing an existing condominium.
With a resale, a buyer can usually walk through the finished residence, examine the building, arrange inspections, evaluate current association expenses, and obtain financing based on a property that already exists. In a preconstruction purchase, the buyer may be making a significant financial commitment based on plans, renderings, disclosure documents, specifications, and a projected timeline.
Understanding the process before signing can make the difference between a confident purchase and an unexpected obligation.
What Does “Pre-Construction Really Mean?
Preconstruction is a broad term. A development may be marketed as preconstruction when it is:
Accepting early reservations before contracts are issued
Selling units before physical construction begins
Under active construction
Completing exterior work and interior buildout
Nearing delivery but not yet ready for occupancy
The stage of the project can affect available inventory, pricing, deposit timing, financing considerations, and the amount of time before closing.
An early buyer may have more choices of floor plans, views, and locations within the building. That buyer may also wait longer, commit more capital over time, and accept greater uncertainty regarding completion dates and the surrounding market.
A later buyer may have fewer units to choose from but may be able to see visible construction progress and face a shorter period between contract and closing.
Reservation Agreement vs. Purchase Contract
The first step is sometimes a reservation agreement rather than a binding purchase contract.
A reservation generally allows a prospective buyer to identify a preferred residence and submit a reservation deposit while the developer prepares or finalizes the offering. It should not automatically be treated as the equivalent of signing the purchase contract.
Under Florida’s Condominium Act, reservation deposits covered by the statute must be placed in escrow. Before a purchase agreement is executed, either the prospective purchaser or the developer may request in writing that the escrow agent return the reservation funds, and the statute directs that they be refunded in full. Once the buyer signs a purchase agreement, the reservation funds may be applied toward the purchase deposit and become subject to the contract and the statutory provisions governing purchase deposits.
Buyers should read the reservation agreement carefully, confirm who holds the money, and understand exactly when the reservation may convert into a contractual purchase obligation.
The Purchase Contract Changes Everything
The purchase contract is the document that establishes the parties’ enforceable obligations. It typically addresses far more than the unit number and purchase price.
The contract may cover:
Deposit amounts and payment deadlines
The developer’s estimated completion window
Permitted extensions and construction delays
Changes to plans, materials, appliances, and finishes
Financing obligations and whether the purchase is contingent on financing
Default remedies
Assignment and resale restrictions
Closing costs and developer charges
Title, parking, storage, and limited common elements
Dispute-resolution procedures
Circumstances under which deposits may be returned or retained
Florida developer contracts contain prominent statutory warnings explaining that oral representations cannot be relied upon as correctly stating the developer’s representations. Buyers should look to the written contract and the required disclosure documents, and not conversations, presentations, or sales-center impressions, for the controlling terms.
If a feature, finish, view, rental policy, parking space, service, or amenity is important to the decision, the buyer should determine how it is addressed in the governing documents.
Understand Florida’s 15-Day Review Period
For qualifying purchases directly from a condominium developer, Florida law provides a 15-day period tied to the buyer’s execution of the agreement and receipt of the required disclosure materials. During the applicable statutory period, the buyer may deliver written notice of the intention to cancel.
The law also addresses certain later amendments that materially alter or modify the offering in a manner adverse to the buyer. The exact application of these rights depends on the facts, timing, documents, and governing law, and the right to void terminates at closing.
This review period should not be treated as additional time to casually consider the purchase. It is the time to have the contract, prospectus or offering circular, proposed condominium documents, budget, management arrangements, and other disclosures reviewed by a qualified Florida real-estate attorney.
Buyers should confirm the deadline, the required method of delivering notice, and the address or party to whom any notice must be sent. Missing a contractual or statutory deadline can have serious consequences.
Read the Offering Documents, Not Only the Brochure
The sales gallery introduces the vision. The disclosure documents explain the proposed legal and operational structure.
Depending on the development, the materials may include:
The declaration of condominium
Articles of incorporation and association bylaws
Rules and regulations
A question-and-answer sheet
The estimated operating budget
A schedule of anticipated expenses by unit type
Proposed management and maintenance contracts
Recreational-facility or shared-amenity agreements
Ground leases or other underlying leases
Phasing plans
Parking and storage provisions
Rental and pet restrictions
The form of unit lease, when applicable
Plans and specifications
Florida’s condominium regulator explains that residential condominium developers with more than seven units generally must file an initial condominium application with the state division, and developments with more than 20 residential units are also generally required to file a prospectus.
The state’s review does not replace the buyer’s independent review. A purchaser still needs to understand how the documents affect that particular residence and intended use.
How Pre-Construction Deposit Schedules Work
Instead of paying one deposit shortly before closing, preconstruction buyers commonly fund the purchase through several scheduled deposits.
How Preconstruction Deposit Schedules Work
Instead of paying one deposit shortly before closing, preconstruction buyers commonly fund the purchase through several scheduled deposits.
A hypothetical schedule might require:
20% at contract
10% a set number of days after contract signing
10% at a later date or construction milestone
The remaining 60% at closing
This is only an illustration. Deposit percentages, deadlines, and milestones vary by development and are negotiable only when the developer agrees.
For a $2 million residence, that example would mean:
$400,000 at contract
$200,000 for the second deposit
$200,000 for the third deposit
$1.2 million due at closing, subject to financing and closing adjustments
For a $3 million residence, it would mean:
$600,000 at contract
$300,000 for the second deposit
$300,000 for the third deposit
$1.8 million due at closing, subject to financing and closing adjustments
The schedule matters as much as the total percentage. A buyer must be able to meet every deadline even if another property has not sold, an investment remains illiquid, financing conditions change, or construction progresses faster than expected.
Where Do the Deposits Go?
Florida law establishes escrow requirements for deposits paid toward a condominium that has not been substantially completed.
Under the current statute, payments up to 10% of the purchase price are placed into an escrow account subject to statutory protections. Payments above that initial 10% are also placed into a special escrow account, but the developer may be permitted to withdraw funds above 10% for actual construction and development costs if the purchase contract authorizes that use and contains the required conspicuous disclosure.
That distinction is extremely important.
A buyer should identify:
The name and address of the escrow agent
Whether a deposit receipt is available
How the first 10% is treated
Whether deposits exceeding 10% may be used for construction
What the contract says about interest earned
What happens to the funds if the buyer cancels properly
What happens if the buyer defaults
What remedies apply if the developer does not complete the transaction
The fact that money is initially delivered to an escrow agent does not necessarily mean every dollar will remain untouched until closing. The contract and applicable law should be reviewed together.
Completion Dates Are Usually More Complicated Than One Date
Sales materials may identify an anticipated year, season, or quarter for completion. The purchase contract will usually provide the more important details: how completion is defined, what notice the developer must provide, what extensions are allowed, and how delays are addressed.
Construction timelines may be affected by permitting, labor and material availability, weather, utility work, inspections, governmental approvals, financing, design changes, and events addressed in the contract’s delay provisions.
Buyers should ask:
Is the completion date an estimate or a contractual deadline?
What events allow the developer to extend the deadline?
Is there an outside date by which the developer must perform?
What remedies are available if that date is not met?
How much notice will the buyer receive before closing?
Can the buyer extend closing if a lender is not ready?
A buyer planning a move, sale, school change, lease termination, or international relocation should avoid building the entire plan around a marketing estimate.
Plans, Finishes, Views, and Amenities May Change
Renderings help buyers imagine the completed development, but renderings are not the finished property.
The contract and disclosure documents may permit substitutions or modifications involving materials, appliances, landscaping, common areas, floor plans, dimensions, amenity programming, and other design elements. The final view may also be influenced by surrounding parcels and future construction beyond the developer’s control.
Buyers should distinguish among:
Features specifically promised in the contract
Features shown in plans and specifications
Representative finishes displayed in the sales gallery
Conceptual images and artist renderings
Neighborhood views that depend on property outside the development
Florida law may provide rights when an amendment materially and adversely alters the offering, but whether a particular change meets that standard is a legal question. A purchaser should not assume that every design revision permits cancellation—or that every marketing image is contractually guaranteed.
Financing Must Be Planned Well Before Closing
Many buyers sign a pre-construction contract months or years before a mortgage can be finalized. Interest rates, lending standards, property values, the buyer’s income, credit, liquidity, and debt obligations may all change during that period.
The contract may not be contingent on the buyer obtaining financing. If financing is unavailable at closing, the buyer could still be obligated to complete the purchase or face the contract’s default remedies.
Financed buyers should discuss the project and expected timing with lenders familiar with new developments. Important considerations may include:
When a lender can begin formal underwriting
Whether the project must satisfy condominium-review requirements
Required down payment and reserves
Appraisal timing
Foreign-national or self-employed borrower documentation
The effect of hotel operations or short-term rentals
How quickly the lender can close after the developer issues notice
A prequalification obtained years earlier is not a guarantee of future loan approval.
Budget for More Than the Purchase Price
The balance due at closing is only part of the financial commitment.
Depending on the contract and property, buyers may also be responsible for:
Lender and mortgage expenses
Title and settlement charges
Recording costs
Documentary or other transaction-related charges allocated by contract
Association working-capital contributions
Initial maintenance payments
Developer administrative or legal fees
Parking or storage purchases
Club, marina, or membership charges
Required furniture or design packages
Insurance premiums
Property-tax and association adjustments
Utility deposits and move-in charges
Closing-cost customs that apply to a typical resale should not be assumed to apply to a developer sale. The contract determines many of these allocations.
Ask for an estimated closing-cost worksheet early, then update the estimate as closing approaches.
Can You Assign or Resel the Contract Before Closing?
Some buyers assume that they can sell their contractual interest before the building is finished. Many developer contracts restrict assignments, require written consent, impose assignment fees, limit marketing, or prohibit assignments entirely except under specified circumstances.
Even when an assignment is permitted, the buyer may remain responsible for certain obligations unless formally released. Market conditions can also make it difficult to find another purchaser at the expected price.
If the ability to assign is important, that issue should be evaluated before signing, not after the buyer’s circumstances change.
Prepare for the Final Walkthrough and Closing
As completion approaches, the developer generally provides instructions concerning inspection or walkthrough procedures, remaining funds, closing documents, insurance, and possession.
During the walkthrough, the buyer may identify unfinished, damaged, or incorrectly installed items for a punch list. Buyers should understand the contract’s process for reporting those items and whether unresolved cosmetic or warranty matters delay closing.
The walkthrough is also an opportunity to verify the residence against the agreed plans and specifications, including:
Appliances and plumbing fixtures
Flooring, cabinetry, and countertops
Doors, windows, and hardware
Electrical outlets and lighting
Heating and cooling operation
Balcony or terrace condition
Parking and storage rights
Visible damage or incomplete finishes
A new residence is not necessarily a flawless residence. Buyers may wish to discuss inspection options with qualified professionals, subject to the contract and the developer’s access procedures.
Review the First-Year Ownership Budget
Developer-prepared condominium budgets are estimates. Florida’s required contract disclosures specifically warn that actual future expenses may exceed the estimated amounts.
Before closing, buyers should revisit:
The current estimated association fee
What utilities and services are included
Reserve funding
Shared costs with a hotel, club, marina, or master association
Insurance arrangements
Staffing and service levels
Parking, valet, and storage expenses
Anticipated taxes
Rental-management costs, if applicable
A residence that fits the purchase budget should also fit the ongoing ownership budget.
Questions to Ask Before Signing a Pre-Construction Contract
Is this a reservation agreement or a purchase contract?
Is the reservation deposit refundable, and how must a refund be requested?
When does the statutory review period begin and end?
Which disclosure documents will be delivered?
What is the complete deposit schedule?
Who is the escrow agent?
Can deposits exceeding 10% be used for construction?
What happens if a deposit is late?
Is the purchase contingent on financing?
What completion extensions does the contract allow?
Is there an outside completion date?
How much notice will be provided before closing?
Which plans, finishes, views, amenities, and services are contractually promised?
What substitutions or modifications may the developer make?
What closing costs and developer fees will the buyer pay?
Is assignment permitted before closing?
What are the rental, pet, parking, and storage rules?
Is the development part of a hotel, club, marina, or master association?
How will punch-list and warranty items be handled?
What happens to the deposit if either party does not perform?
Buy the Documents, Not Only the Dream
Preconstruction purchases begin with possibility: a new residence, a carefully designed environment, and the anticipation of becoming one of the first owners in a development.
That vision deserves the same attention as the legal and financial commitment behind it.
Before signing, understand the difference between a reservation and a contract, confirm the deposit schedule, learn how the funds may be used, review the developer’s completion rights, prepare for financing and closing costs, and examine the documents that will govern the property after delivery.
The goal is not to remove the excitement from buying preconstruction. It is to support that excitement with clarity—so the residence you anticipate is also a purchase you are prepared to complete.
Resources
Florida Statutes § 718.202: Sales or Reservation Deposits Before Closing
Florida Statutes § 718.503: Developer Disclosures and Voidability
Florida DBPR: Condominium Developer Registration and Filing Requirements
Florida DBPR: Division of Condominiums, Timeshares and Mobile Homes
Considering a new development in Miami-Dade, Greater Fort Lauderdale, or Palm Beach? Contact Diana Perez for guidance comparing locations, ownership structures, deposit schedules, and lifestyle considerations before selecting a residence.
This article is for general informational purposes only and is not legal, tax, financial, insurance, lending, construction, inspection, or investment advice. Contracts, project structures, deposit schedules, fees, completion terms, and buyer rights vary. Buyers should independently verify all information for the specific development and consult qualified Florida legal, financial, tax, insurance, lending, and inspection professionals before signing or closing.