Pre-Construction Deposits in Florida: What the 50% Really Means — Escrow, Draw Schedules, and How to Protect Your Money

South Florida’s luxury towers routinely ask for 20–50% of the purchase price before closing. Only a fraction of that sits in protected escrow. Here is what Florida Statute 718.202 actually guarantees, where your money goes at each draw, and the contract terms to verify before you wire a dollar.

The number that stops most first-time pre-construction buyers is not the price per square foot — it is the deposit. In South Florida’s current luxury cycle, staged deposits totaling 30–50% of the purchase price before closing are market-standard, and 50% structures are common at the top of the market. The instinctive question — is my money safe? — has a precise legal answer, and it is more nuanced than most sales galleries volunteer. The governing law is Section 718.202 of the Florida Condominium Act, and its central distinction is simple: the first 10% of the purchase price is treated very differently from everything above it. This guide is general information, not legal advice — confirm the specifics of any contract with a licensed Florida real-estate attorney before signing or wiring funds.

How do Florida deposit schedules actually work?

Luxury developers collect deposits in stages tied to milestones — typically 10–20% at contract, 10% at groundbreaking, 10–15% at top-off, and a final tranche before closing, totaling 30–50%. These percentages are market convention, not law; Florida law only dictates how the money is held once paid.

A representative structure at projects like St. Regis Bahia Mar or Olara West Palm Beach runs 20% at contract, 10% at groundbreaking, 10% roughly twelve months later, and the balance at closing. Each developer sets its own schedule in the purchase agreement, and schedules shift as sales momentum builds — early buyers sometimes negotiate lighter front-ends. Our walkthrough of how to buy pre-construction in South Florida covers the full contract-to-closing sequence.

What does escrow protect — and what doesn’t it?

Under Fla. Stat. $718.202, all payments up to 10% of the sale price must be held by a licensed escrow agent until closing. Deposits above 10% go into a separate special escrow account under $718.202 — but the statute expressly allows the developer to pull those excess funds out for construction once building begins, if your contract permits it.

The first 10% is the hard floor of protection: if you properly terminate the contract, subsection requires that escrowed money be returned to you with interest. If you default, it goes to the developer. The statute also lets the state accept a surety bond or irrevocable letter of credit from the developer in lieu of escrow, so “escrowed” can mean “bonded” — ask which applies. Above the 10% line, protection is conditional: the money starts in the special account, but its statutory shield lasts only until the developer lawfully draws it. That is the honest meaning of a 50% deposit — 10 points guaranteed in escrow, up to 40 points potentially deployed into the building you are buying.

Can a developer spend my deposit on construction?

Yes — the portion above 10%, once construction has begun, if the contract authorizes it. Fla. Stat. $718.202 limits use to “actual costs incurred” in construction and development — demolition, site clearing, permit and impact fees, utility reservation fees, and architectural and engineering fees — and requires a bold-type warning on the contract’s first page.

The statute’s prohibited-use list is your real safeguard: excess deposits may not fund “salaries, commissions, or expenses of salespersons; for advertising, marketing, or promotional purposes; or for loan fees and costs, principal and interest on loans, attorney fees, accounting fees, or insurance costs”. Look for the mandated legend — “ANY PAYMENT IN EXCESS OF 10 PERCENT OF THE PURCHASE PRICE MADE TO DEVELOPER PRIOR TO CLOSING… MAY BE USED FOR CONSTRUCTION PURPOSES BY THE DEVELOPER” — in boldfaced type on page one. If it is missing while the contract purports to allow draws, that is a red flag worth a lawyer’s letter. Willful violation of the escrow rules is a third-degree felony under $718.202, and failure to establish or fund the account is prima facie evidence of intent.

What happens if the project is delayed or cancelled?

If the developer cancels or fails to comply with $718.202, the contract is voidable by the buyer and all deposits must be refunded with interest “at the highest rate then being paid on savings accounts” in the area. Delay rights, by contrast, come mostly from your contract’s outside completion date — not the statute.

Completion has a statutory definition: issuance of a certificate of occupancy for the entire building, or its governmental equivalent. Most luxury contracts give the developer a multi-year outside date plus force-majeure extensions; if that date passes, the buyer’s remedy is typically a refund of deposits, and if construction never starts, undrawn special-escrow funds are returned. Separately, Florida gives pre-construction buyers a non-waivable 15-day right to cancel after signing and receiving all condominium documents. The practical risk in a cancellation is not losing the money but recovering it slowly and without opportunity cost — one reason the developer’s balance sheet matters as much as the renderings. Track sponsor track records in our August 2026 pre-construction monthly and the West Palm Beach condo tracker.

How should foreign buyers think about deposits?

Deposit and escrow rules under $718.202 apply identically to foreign nationals — residency changes nothing about how funds are held. The differences arrive later: cross-border wire documentation, entity structuring, and, on eventual resale, FIRPTA withholding of generally 15% of the gross sale price.

FIRPTA deserves its own briefing — the withholding applies to the amount realized, not the gain, and exemptions and reduced-rate certificates exist — so treat this paragraph as a preview; a dedicated Haute Living FIRPTA guide for foreign pre-construction buyers is forthcoming. At the deposit stage, foreign buyers should confirm the escrow agent’s identity and wiring instructions directly by phone, and consider whether contracts at South Flagler House, Rivage Bal Harbour or other branded residences will be held personally or through an entity — restructuring after signing can trigger transfer-consent provisions.

What must be in the contract before you wire anything?

Five things, verified in writing: the escrow agent’s name and Florida license status; the bold $718.202 construction-use legend; the full deposit schedule with dates and triggers; the outside completion date and refund mechanics; and your 15-day $718.503 rescission rights with the complete document set delivered.

Add two practical checks. First, confirm whether the developer is escrowing or substituting a bond or letter of credit under $718.202 — both are lawful, but they behave differently in a dispute. Second, get the escrow agent’s wiring instructions from the agent directly, never from an emailed PDF alone. Buyers comparing structures across the market — from Pier Sixty-Six Residences to the towers in our Fort Lauderdale 2026 guide and Top 20 ranking — will find deposit schedules are increasingly a negotiating lever, especially in a market where developers are chasing presale thresholds. Again: this is general information, not legal advice; have a Florida real-estate attorney review the specific contract.

What do buyers ask most about pre-construction deposits?

The recurring questions cluster around safety of funds, refundability, interest, and what happens when timelines slip. The answers below are grounded in the 2025 Florida Statutes and market convention as of August 2026 — with the caveat that your contract’s language controls the details.

Is my entire 50% deposit held in escrow?

Initially, yes — but only the first 10% must stay there until closing. Amounts above 10% may be drawn for construction once building begins, if the contract permits.

Who holds the escrow?

An escrow agent as defined by the statute — typically a Florida attorney, bank, or licensed title company named in your contract.

Do I earn interest on my deposit?

Interest follows $718.202: to the buyer if you properly terminate; to the developer if you default; and, if the contract is silent, to the developer at closing.

Can I cancel after signing?

Yes — Florida grants a non-waivable 15-day rescission period after execution and receipt of all condominium documents on developer sales.

What if the developer misses the completion date?

Your remedy is contractual — typically termination and refund of deposits after the outside date. Undrawn escrowed funds are returned; statutory violations make the contract voidable with interest.

Can the developer spend my deposit on marketing or salaries?

No. $718.202 expressly prohibits using excess deposits for salespersons’ salaries or commissions, advertising, marketing, loan fees, interest, attorney or accounting fees, or insurance.

Is a 50% deposit legally required?

No — it is market convention in South Florida luxury pre-construction. The statute regulates custody of deposits, not their size.

Are foreign buyers’ deposits treated differently?

No — $718.202 applies regardless of nationality. FIRPTA withholding is a resale-stage consideration, not a deposit rule.

What happens to my money if the project never breaks ground?

Excess funds cannot be drawn before construction begins, so deposits should remain in escrow and be refundable on termination — confirm the trigger language in your contract.