Most buyers sign a pre-construction contract believing their deposits sit in escrow until closing. In Florida, that is true for exactly one slice of the money.
Section 718.202 of the Florida Statutes requires the developer to place all payments up to 10% of the purchase price with an independent escrow agent. Payments above 10% go into a special escrow account too. But if the contract says so, the developer may withdraw that excess once construction has begun and spend it on the actual costs of building (Florida Statutes §718.202, 2026, The Florida Senate).
South Florida developers often use that permission. The useful question about a deposit schedule is how much of your money could already be inside the building if something goes wrong.
What the statute actually says
- The first 10% stays in escrow until closing or until the contract ends, unless a bond or letter of credit has been accepted in its place (see below). Terminate properly and it returns to you with interest; default and it goes to the developer (§718.202(1)).
- Money above 10% funds construction only if the contract allows it. The contract must carry a bold legend on page one, directly above your signature, saying so (§718.202(3)).
- "Construction" is defined narrowly. Permits, impact fees, site work, architecture and engineering qualify. Commissions, marketing, loan interest and fees, legal, accounting and insurance do not.
- The escrow agent must be independent of the developer and its affiliates (§718.202(8)). Willful violation is a third-degree felony, and a non-compliant contract is voidable with refund plus interest (§718.202(5), (7)).
Some buyer guides say a developer must post a surety bond before drawing deposits. The statute text reads this way. Subsection (3), on funds above 10%, allows withdrawal if the contract so provides and construction has begun, for actual construction costs only. Bonds appear in subsection (1), on the first 10%: for residential condominiums, the state's condominium division may accept a surety bond or irrevocable letter of credit in place of escrow, and released initial 10% deposits must be secured by a bond or letter of credit in an equivalent amount. Confirm with a Florida real estate attorney how these provisions apply to your contract.
A worked example: a $1.2M unit on illustrative schedules
Recent reporting puts standard South Florida schedules at 20% to 30% before closing and luxury towers at 40% to 50% (Haute Residence, "South Florida Pre-Construction Monthly: The August 2026 Pipeline Report," Aug 18, 2026). A common ladder is 10% at contract, then 10% steps at time or construction milestones (PreConstructionMiami.net, "Miami Pre-Construction Deposit Structure Explained," Jan 15, 2026).
The two schedules below are illustrative, built for this calculation, and are not the terms of any building mentioned here. Assume the contract carries the construction-use legend and construction has started. In both, $120,000 stays locked in escrow at every stage.
| Stage | Schedule A (10/10/10/10): total paid | A: can be spent on construction | Schedule B (20/10/10/10): total paid | B: can be spent on construction |
|---|---|---|---|---|
| Contract | $120,000 | $0 | $240,000 | $120,000 |
| Second payment | $240,000 | $120,000 | $360,000 | $240,000 |
| Groundbreaking | $360,000 | $240,000 | $480,000 | $360,000 |
| Top-off | $480,000 | $360,000 | $600,000 | $480,000 |
Look at the spendable columns. Under Schedule A, $360,000 of the $480,000 you paid, or 75%, can be spent before you get a key. Under Schedule B it is $480,000 of $600,000, or 80%. The protected amount never moves past $120,000, however much more you wire.
Our position: underwrite every dollar above the first 10% as capital exposed to the developer's ability to finish. On a well-financed project that exposure may never matter. It still belongs in your numbers as an unsecured position.
When the exposure actually bites
If the tower completes and closes, the 10% line is irrelevant. Otherwise:
The project stalls. Spent deposits are no longer in escrow. Recovery then depends on the contract, the developer's assets and where buyers rank against the construction lender.
You cannot close. Under the statute, escrowed funds go to the developer if the buyer defaults. Beyond that, the contract defines what the developer may keep if you fail to close, and in some contracts that is the full deposit, not 10%. Read the default clause before signing. Buyers planning to assign before completion carry this risk too, so check whether assignment is allowed and at what cost.
Delivery slides. Federal law contains an exemption for sales under a contract that obligates the seller to erect the building within two years (15 U.S.C. §1702(a)(2), Legal Information Institute, Cornell Law School). What matters to you is the completion deadline in your own contract: the date, the delays it excuses and your remedy once it passes decide whether a late project gives you an exit.
Your 15-day window
Under §718.503, you can void a developer contract by written notice within 15 days after the later of signing and receiving all required documents. A fresh 15 days opens after any amendment that materially and adversely changes the offering. Waivers of these rights have no effect (Florida Statutes §718.503, 2026, The Florida Senate).
Use that window for the checklist below. A reservation deposit, before any purchase contract, must be refunded in full on written request (§718.202(6)).
The checklist we run before a client reserves
- Escrow agent. Who it is, and proof it is independent. Ask for your deposit receipt.
- The construction-use legend. On page one above the signature? If absent, your excess deposits should stay in escrow until closing.
- Substitutes for the 10%. Has a bond or letter of credit replaced cash escrow? Get the issuer's name.
- Construction lender. Is the loan closed, with whom, for how much of the budget?
- Outside completion date. The deadline, the force majeure language and your remedy if it passes.
- Default terms. What the developer keeps if you fail to close, and what you get if it fails.
- Assignment. Allowed or not, when, with what fee and consent.
- Wire timing. Each milestone against when your funds are actually available, including currency conversion.
Every item is a contract question, so have a Florida real estate attorney review the final contract before you sign. For ownership costs after delivery, see our guide to buying a condo in South Florida, and for pricing, our 2026 condo market analysis.
Frequently asked questions
Is my whole pre-construction deposit held in escrow in Florida?
Only the first 10% must stay in escrow until closing. Payments above that may be released for construction costs if your contract contains the statutory legend and construction has begun.
Can I cancel a pre-construction condo contract in Florida?
You have 15 days after signing and receiving all required documents, plus 15 days after any materially adverse amendment. Other exits depend on the contract.
Is a reservation deposit refundable?
Yes. Until a purchase contract is signed, it must be refunded in full on written request.
This article is general information, not legal advice.
Before you reserve
Weighing a tower such as Waldorf Astoria Miami, Cipriani Residences or The Edition Residences Fort Lauderdale? Send us the price sheet and draft contract. Our investing team will turn the deposit schedule into a written table like the one above, showing what stays locked, what can be spent and when, plus the questions to put to the developer and your attorney before the 15 days run out.
Book a call or phone +1 (786) 252-3325.