The usual deposit schedule
Deposit schedules vary by project and change during a sales campaign. A common structure asks for a reservation deposit, then installments at contract signing, groundbreaking and later construction milestones, with the balance at closing. Totals of 20 to 50 percent of the purchase price are common in Miami. Higher deposits are often requested from buyers who will not finance the closing in the United States.
What Florida Statute 718.202 provides
Section 718.202 of the Florida Statutes governs deposits on condominium units sold before completion. In summary:
- Reservation deposits must be held by an escrow agent and refunded promptly on request before a purchase contract is signed.
- Payments up to 10 percent of the purchase price must be held in escrow until closing. They are released to the buyer if the buyer properly terminates the contract, and to the developer if the buyer defaults.
- Payments above 10 percent go into a special escrow account. If the contract permits, the developer may withdraw them after construction begins, but only to pay actual construction and development costs. Marketing, sales commissions, loan payments, legal fees and insurance are excluded.
- A contract that allows this use must carry a bold notice on its first page and immediately above the buyer's signature line.
- The escrow agent must be independent of the developer and qualified under the statute, for example a bank, a Florida attorney or a title insurer.
What this means in practice
The first 10 percent is well protected by escrow. Amounts beyond it may, under a contract that allows it, already be built into the walls and foundations by the time a problem arises. If a project stalls or a developer fails, recovering those funds may depend on litigation, bonds or other remedies, and is not assured. The statute protects the process; it does not guarantee the outcome.
Read the bold notice on the first page of the contract before anything else.
Questions to ask before signing
- Who is the escrow agent, and is it independent of the developer?
- Does the contract allow use of deposits above 10 percent for construction?
- Is construction financing in place, and how much of the building is already under contract?
- What is the outside completion date, and what are the buyer's rights if it is missed?
- Can the contract be assigned before closing, and at what cost?
- What happens to deposits if the buyer cannot close, for example because financing is unavailable?
A practical approach
Choose the developer first and the unit second. Where a project offers more than one deposit schedule, compare the cost of a lower deposit against any price difference. Keep the capital needed for later installments available, because missing one can put earlier deposits at risk. And have a Florida real estate attorney review the contract before the rescission period ends.
Sources: Florida Statutes §718.202 (2025 edition via Justia). General information, not legal advice. Contracts differ, and statutory amendments may apply only to condominiums created after specific dates.