Pre-construction condos in Miami: how it works

How does buying pre-construction work in Florida?

Short answer: you reserve a unit, sign a purchase contract with the developer, pay deposits on a schedule during construction, and pay the balance when the building is finished and the unit closes.

The usual path:

1. Reservation (optional). Before it can sign binding contracts, the developer must file the condo with the state. It can take reservations once it has filed an escrow agreement and a reservation form. A reservation deposit must be refunded at once, in full, when you ask in writing.
2. Contract. You sign the developer's purchase contract and receive the condo documents.
3. 15 days to cancel. Florida gives you 15 days to cancel for any reason (see below).
4. Deposits. You pay deposits at set dates or construction milestones.
5. Construction. This can take years. The prospectus must state the estimated latest completion date.
6. Completion and closing. The unit can be deeded only after the building is substantially complete. You inspect the unit, pay the balance and closing costs, and receive the deed.

How much deposit do I pay, and when?

Short answer: it depends on the contract. Deposits are usually paid in several stages before completion, and the total can be a large part of the price.

A sample schedule, only to show how it can work (every contract is different):

• 10% when you sign the contract.
• 10% a few months later, or when construction starts.
• 10% when the building reaches its top floor ("topping off").
• The balance at closing.

On a $600,000 unit, that would be $60,000 at each of the first three stages and $420,000 at closing. Some projects ask for less up front, and some for more. Read the schedule before you sign. A missed deposit is usually a default, and the contract can let the developer cancel and keep the deposits you already paid.

Is my deposit protected?

Short answer: the first 10% of the price must stay in escrow until closing. Money above 10% is also escrowed, but if the contract allows it, the developer can use it to build once construction has started, and that part is at risk if the project fails.

Florida Statutes 718.202 sets these rules while the building is not yet substantially complete:

• Up to 10% of the price: the developer must place it in an escrow account with an escrow agent who is independent of the developer: for example a bank, a Florida lawyer, a licensed real estate broker or a title insurer.
• Above 10%: it goes into a special escrow account and cannot be used before closing, except for refunds to you or, if the contract allows it, for the actual costs of construction and development once construction has begun.
• What it cannot pay for: sales salaries and commissions, advertising and marketing, loan fees and interest, lawyers' and accountants' fees, or insurance.
• The warning in your contract: if the developer can use the money above 10%, the contract must say so in bold on the first page, right above your signature: "ANY PAYMENT IN EXCESS OF 10 PERCENT OF THE PURCHASE PRICE MADE TO DEVELOPER PRIOR TO CLOSING PURSUANT TO THIS CONTRACT MAY BE USED FOR CONSTRUCTION PURPOSES BY THE DEVELOPER."
• Bond instead of escrow: the state's condo division can let a developer use a surety bond or a letter of credit instead.

Example: on a $600,000 unit with 30% paid before closing, $60,000 (10%) stays in escrow and up to $120,000 can be spent on construction. If the developer cannot finish, you may have to claim that money from the developer or its assets.

If you cancel within your rights, the escrow returns your money with any interest earned. If you default, the money goes to the developer. If the contract says nothing about interest, the interest goes to the developer at closing. A developer that breaks the escrow rules gives you the right to cancel and get your money back with interest. Ask a lawyer to explain the escrow section, and ask the escrow agent for a receipt for each deposit.

Can I cancel after I sign?

Short answer: yes, within 15 days. Florida lets the buyer of a new condo from a developer cancel the contract for any reason within 15 days after signing and receiving all the required documents, with the deposit refunded.

The contract must say this in capital letters. The 15 days are calendar days and start only after you have both signed and received all the documents the developer must give you. Send any cancellation in writing, in the way the contract requires, and keep proof of delivery.

You also get 15 days to cancel after you receive any change to the documents that materially hurts you, for example a big change in the unit or the common areas. The developer must send such changes before closing. You can also delay the closing by up to 15 days after you receive all the documents. Any waiver of these rights in the contract has no effect. The rights end at closing.

After these windows close, the contract is binding, and canceling after that usually means losing your deposits.

What are the condo documents, and what should I read?

Short answer: the prospectus (for condos of more than 20 units), the declaration, the estimated budget and the plans. Read the budget, the closing costs and the parts about changes and completion.

• The estimated operating budget. It shows the expected monthly HOA fee for each unit type and the reserves. By law it is "a good faith estimate only", and higher actual costs do not give you a right to cancel. If closing is more than 12 months after the filing, you receive the current budget at closing.
• Developer guarantee. A developer can guarantee that fees will not go above a set amount for a period, and pay any costs above it. If it does, the documents say for how long.
• Estimated closing costs. The prospectus must include a schedule of the closing costs the buyer pays, and say who pays for title insurance. In new construction, these can include costs that a seller often pays in a resale, such as the stamp tax on the deed and the owner's title policy.
• The developer's rights to change plans, unit size measurement, finishes and amenities.
• The estimated latest completion date.
• Recreation leases. If the condo has a lease for its recreation areas, the documents must warn you in capital letters.
• Flood disclosure. Since October 1, 2025, developer contracts must also include a flood disclosure.

Do not rely on what a salesperson says. Florida requires the contract to state that oral representations cannot be relied on. If the developer's ads were false or misleading and you relied on them, Florida law gives you a right to cancel or claim damages, within time limits.

What happens if the building is delayed?

Short answer: your rights depend on the contract. Florida requires an estimated latest completion date, but no fixed legal deadline.

Read the contract's completion terms: the estimated date, the "outside date" after which you may be able to cancel, and the extra time allowed for hurricanes, labor or supply problems and permit delays. A federal law called the Interstate Land Sales Act used to cover many condo sales; since March 25, 2015, condos are exempt from its registration and disclosure rules. Completion means the building has its certificate of occupancy. Plan your money for a delay of months, or even years.

Can I sell my contract before closing (assignment)?

Short answer: only if the contract allows it. Florida has no law on this, so the contract decides. Many developer contracts forbid assignment, allow it only with the developer's written consent, or charge a fee.

An assignment means another buyer takes over your contract, pays you for your deposits plus any profit, and closes in your place. Developers often limit assignments until most units are sold. Ask before you sign: can you assign, when, and at what fee?

Taxes matter here. Under US tax rules, a contract to buy real property is itself an interest in real property, so a foreign seller of an assignment may face FIRPTA withholding. Whether the Florida stamp tax applies to an assignment is not clear. Ask a tax adviser and the closing agent before you agree to assign.

Who controls the building, and what about reserves?

Short answer: the developer controls the association at first, then gives control to the owners in steps. Before the handover, the developer cannot waive reserves.

• Handover (Florida Statutes 718.301): when 15% of the units are sold, owners elect at least one third of the board. Owners elect a majority at the first of: 3 years after 50% of the units are sold, 3 months after 90% are sold, when all units are built and none are still for sale, or 7 years after the surveyor's certificate is recorded, among other events.
• Reserves: a developer-controlled association cannot vote to waive or reduce reserves.
• Fee increases: while the developer controls the board, yearly fees cannot go above 115% of the year before without approval by a majority of all owners' votes.
• Turnover report: before the handover, the developer must provide a turnover inspection report for buildings of 3 stories or more, which includes a structural integrity reserve study. See condo rules after Surfside.

What happens at closing?

Short answer: when the building is finished, the developer sets a closing date, often with short notice. You inspect the unit, pay the balance and closing costs, and get the deed.

• Walk-through. You inspect the unit and make a list of defects. The contract says how the developer fixes them.
• Balance. You pay the rest of the price by wire, or with a loan. If you need a loan, start early: the lender must approve both you and the building, and the appraisal can be lower than your price if the market has changed.
• Closing costs. Use the schedule in the prospectus. Our closing costs guide explains each tax and fee.
• First HOA bills. Your monthly fee starts at closing.

What are the main risks?

Short answer: delays, the developer's use of deposits above 10%, higher HOA fees than the estimate, a different market at closing, and contract terms that favor the developer.

• Market risk. Prices can fall during construction. You must close at the contract price, or lose deposits.
• Financing risk. Rates and lender rules can change before closing, especially for foreign buyers.
• HOA fee risk. The budget is an estimate. Insurance, staff and reserve costs can push fees up after the owners take control.
• Developer risk. If the project fails, the 10% in escrow is protected, but deposits used for construction may be hard to recover.
• Change risk. Finishes, amenities and plans can change within the limits of the contract.
• Rental rules. The documents set if and how often you can rent. A condo-hotel works very differently from a normal condo.

How do I compare projects?

Short answer: compare the developer's past buildings, the deposit schedule, the escrow terms, the estimated fee per sq ft, and the rental rules.

Check what the developer has finished before and whether those buildings were delivered on time. Compare the estimated monthly fee per sq ft, not only the total. Ask how the developer measured the unit size and whether the balcony is included. Ask whether deposits above 10% will be used for construction. And see how resale buildings nearby are priced today on RealVista's city and building pages.

Step by step

1. Set your budget for the deposits, the balance and closing costs, plus money for a delay.
2. If you will need a loan, talk to a lender before you sign.
3. Read the deposit schedule, the escrow section and its bold warning, the budget, the closing cost schedule and the rental rules.
4. Sign the contract and get all the documents. Write down the date.
5. Have a Florida real estate lawyer review the documents within the 15 days.
6. Pay each deposit by wire to the escrow agent named in the contract, after you confirm the wire details by phone. Ask for a receipt.
7. Keep every notice and document change the developer sends, and note the date you receive it.
8. At completion, inspect the unit, have your funds or loan ready, and close.