Thinking about a Miami preconstruction condo but unsure how the deposits work? You’re not alone. Deposit schedules, escrow rules, and assignment rights can feel complex when you’re comparing new developments across Miami-Dade. In this guide, you’ll learn what to expect at each milestone, how to protect your funds, and how to plan your cash flow with confidence. Let’s dive in.
Miami deposit basics
Preconstruction deposits in Miami typically follow a multi-stage schedule. You may see a small reservation payment first, followed by a larger deposit at contract signing, then staged installments during construction, and the rest at closing. Exact numbers vary by developer, building type, and financing conditions.
Common patterns
- Pattern A: Lower early deposits. Contract signing around 10 percent, then 10 to 20 percent in later installments tied to time or construction milestones, with more than 50 percent usually due at closing.
- Pattern B: Larger early deposits. Contract signing around 20 to 30 percent, then one or two additional installments of 10 to 20 percent during construction, with the balance at closing.
- Pattern C: Extended milestones. Initial 10 percent at contract, followed by several staged payments of 5 to 15 percent at structural, envelope, and interior completion, then the balance at closing.
Always use the purchase agreement and condominium offering documents as your authoritative source. Treat examples as ranges, not promises.
Milestones and timing
Most schedules anchor to key events:
- Reservation agreement to hold a unit while you review contracts. Often a flat, refundable amount for a short window.
- Contract signing when the first major deposit is due and obligations become binding.
- Construction milestones like slab pour, topping out, envelope completion, and interior progress.
- Temporary Certificate of Occupancy (TCO) or Certificate of Occupancy (CO) near completion.
- Closing when title transfers and the remaining balance is paid.
Developers may request significant funds well before closing. Map each deposit date against your liquidity so you’re never forced to scramble.
Refunds and contingencies
Deposit refundability depends on the contract and any statutory rescission periods. After certain dates or waivers, deposits may become nonrefundable. Common buyer protections include:
- Financing contingency if your lender declines the loan.
- Appraisal contingency if the property does not appraise at the purchase price.
- Offering document review to confirm terms in the prospectus, declaration, and bylaws.
- Inspection and contract review periods as defined in the agreement.
Assignment rights also impact strategy. Some developers allow assignments with restrictions or fees. Others prohibit assignments for a period. Confirm the language before you commit.
Escrow and Florida rules
Florida’s Condominium Act (Chapter 718) governs condominium creation, offering plans, and purchaser protections. Your deposits are typically held in escrow by a title company, escrow agent, or developer-designated escrow account, with release conditions defined in the contract and offering documents. Key points to confirm include:
- Who holds your funds and the type of account.
- Release conditions tied to milestones or dates.
- Accounting and reporting obligations.
If a developer becomes insolvent, your remedies depend on the escrow structure and contract protections. Have an experienced attorney review escrow language and protections spelled out in the offering documents.
Developer risk signals
Before you wire a dollar, gauge the project’s execution risk:
- Track record. Completed projects in Miami, delivery timelines, and buyer service.
- Financial partners. Whether a reputable construction lender or institutional equity is committed.
- Presale percentage. Projects with low presales at launch carry higher risk of delay.
- Entity structure. Special purpose entities are common. Larger, established developers often present lower risk than new entrants.
- Litigation history. Prior suits, liens, or contractor disputes can be red flags.
Contract terms to review
Focus on the sections that determine how your money moves and your options if plans change:
- Escrow language. Where deposits sit, who controls release, and the conditions that trigger release.
- Cancellation and termination. When you can cancel and receive a refund, and what remedies exist for delays or defects.
- Assignment rights and fees. Whether you can resell your contract and what it costs.
- Change orders and upgrades. Pricing, deadlines, and payment timing for finish selections.
- Completion metrics. What defines substantial completion, punchlist obligations, TCO, and CO.
- HOA budgets and reserves. Estimated assessments and reserve funding assumptions.
Protect your deposits
You can improve your risk profile with a few practical steps:
- Independent escrow. Favor deposits held by a third-party title or escrow company.
- Contingencies. Seek financing or appraisal contingencies where possible.
- Milestone-based staging. Tie installments to measurable construction milestones, not just dates.
- Warranty review. Understand builder warranties and how claims are handled after closing.
- Attorney negotiation. Ask counsel to cap nonrefundable portions or to add protections in the event of insolvency or significant delay.
Deposit financing options
Most retail mortgages fund only at closing, not during construction. Buyers typically use cash, a HELOC, lines of credit, or private “deposit financing” for installments. Some developers offer preferred programs that can help, though they may carry higher costs and strict timelines. Model interest, fees, and repayment against your expected closing date before you commit.
Cash-flow planning
Build a complete picture of your outlays so there are no surprises:
- Reservation payment if applicable
- Contract deposits and each scheduled installment
- Any fees tied to deposit transfers
- Interest and fees if borrowing to fund deposits
- Down payment and closing costs at closing
- HOA deposits, initial reserves, and any pre-closing assessments
- Upgrade and change-order deposits
- A contingency reserve for delays or unexpected costs
Create a simple timeline that aligns each expected payment with your liquidity. Do not assume the construction schedule will be met exactly as marketed.
Illustrative examples
Below are two sample schedules to show how cash can flow. Treat these as illustrative only. Always confirm actual amounts and dates in your contract and offering documents.
Example 1: Mid-rise, $600,000 purchase price
- Reservation: $10,000
- At contract signing: 10 percent = $60,000
- 120 days later or early milestone: 10 percent = $60,000
- Mid-construction: 10 percent = $60,000
- 60 days before closing: 10 percent = $60,000
- Balance at closing: 60 percent = $360,000
- Total deposits before closing: $240,000
Example 2: High-rise, $1.8M unit with heavier early equity
- Reservation: $25,000
- At contract: 20 percent = $360,000
- 6 months: 10 percent = $180,000
- 12 months, envelope complete: 10 percent = $180,000
- Balance at closing: 60 percent = $1,080,000
- Total deposits before closing: $725,000
Assignment and exit planning
Assignment rules vary across Miami developments. Some allow you to resell your contract before closing, often with consent or a transfer fee. Others prohibit assignments for a defined period. If you plan to exit early, prioritize clear assignment language and understand market liquidity. For investors, also confirm rental rules in the declaration, since some condominiums restrict short-term rentals.
After Surfside: what changed
Following the 2021 Surfside condominium collapse, lenders and buyers increased scrutiny on building safety, reserves, and developer execution. In some cases, that has meant higher presale thresholds and larger buyer deposits to satisfy financing requirements. It has also pushed more detailed diligence on structural reports, reserve policies, and the developer’s track record.
Quick diligence checklist
Use this shortlist before you wire funds:
- Developer background and completed Miami projects
- Construction lender and equity partners identified
- Presale percentage and financing status
- Escrow agreement details and release conditions
- Cancellation rights and delay remedies
- Assignment rights and any transfer fees
- Milestone-based deposit schedule with dates
- HOA budget, reserve approach, and projected assessments
- Warranty terms and punchlist process
- Rental rules aligned with your plan
Ready to plan your move?
If you want a second set of eyes on a deposit schedule or help comparing developments across Miami-Dade, you do not have to navigate it alone. Get boutique, investment-savvy guidance paired with modern tools to make a confident decision. Start a conversation with Elena Terrones today.
FAQs
How do Miami preconstruction deposit schedules typically work?
- Most include a small reservation payment, a larger deposit at contract signing, staged installments at construction milestones, and the remaining balance at closing.
What protects my deposit in Florida preconstruction deals?
- Protections come from escrow structure, release conditions in your contract, and any statutory rescission periods. Independent escrow and attorney review are key.
Can I use my mortgage to pay the deposits before closing?
- Typically no. Mortgages fund at closing. Buyers often use cash, HELOCs, or private lending for deposits, and repay when the mortgage funds.
Can I assign my preconstruction contract before closing in Miami?
- Sometimes. Assignment rights and fees vary by project and may require developer consent. Review the assignment clause before you sign.
What happens if the project is delayed?
- Delays do not usually trigger an automatic refund. Your remedies depend on specific contract terms for delays or termination. Negotiate meaningful protections up front.
How much cash should I plan for deposits?
- It varies by developer, but plan for 5 to 30 percent across early installments before closing, plus closing costs and a cushion for timing shifts.
