Is My Deposit Safe When I Buy a Pre-Construction Condo in Miami?
Under Florida law, deposits up to 10% of the purchase price must sit in a separate escrow account, untouched by the developer, until closing or substantial completion. You also get a 15-day rescission period after signing to walk away for any reason and get every dollar back. After that window closes, though, your deposit becomes non-refundable unless the developer defaults, and 2026 has already produced several Miami buildings where that's exactly what happened.
By Lynley Ciorobea | July 15, 2026
If you're looking at a pre-construction unit in Coral Gables, Coconut Grove, or anywhere else in Miami-Dade right now, you're not the only one asking whether your deposit is actually protected. It's one of the most searched questions among Miami condo buyers this year, and it's showing up everywhere from BiggerPockets investor threads to YouTube videos titled things like "know the risks before you buy." That's not an accident. Real Miami buildings are running into real trouble in 2026, and the deposit money sitting in escrow is exactly what's at stake.
I walk buyers through this constantly, especially the ones coming from out of state who assume a deposit works the same way everywhere. It doesn't. Here's what Florida actually protects, what it doesn't, and how to size up a specific project before you sign anything.
What Florida Law Actually Protects
Florida Statute 718.202 sets the rules for pre-construction condo deposits, and it's more protective than a lot of buyers expect, up to a point.
The escrow requirement. Any deposit up to 10% of the purchase price has to sit in a separate escrow account with a bank, title company, or law firm. The developer can't touch it until the building reaches substantial completion or you close. If a developer wants access to deposit amounts above that 10% threshold to fund actual construction, the contract has to disclose that clearly, and you should read that section closely before you sign.
The rescission period. Once you sign the purchase contract and receive the condominium documents, you get 15 days to change your mind for any reason and get a full refund. This is your real due diligence window. Use it to have a Florida real estate attorney review the contract, not just skim it. Once those 15 days pass, you're committed, and walking away means losing your deposit.
What happens after that. Deposits become non-refundable after rescission ends, with one major exception: developer default. If the developer misses the contractually stated "Outside Date" for substantial completion, or delivers a unit materially different from what you were sold, you may be entitled to a full refund plus interest. That protection only works if the contract language is clear and the developer actually follows the escrow rules in the first place, which brings us to what's happening on the ground in 2026.
What's Actually Going Wrong in Miami Right Now
This isn't a theoretical risk. As of late 2025, 13 South Florida development sites had landed in bankruptcy court or were facing active foreclosure proceedings, up from just 5 sites in 2024. That trend hasn't slowed down.
A few specific examples from this year:
Solina Bay Harbor is facing a foreclosure claim from its lender over an unpaid $2.61 million loan, alongside two active buyer lawsuits seeking deposit refunds.
One Thousand Museum's condo association sued its developer in April 2026 over what one local outlet called "vanishing condo cash."
Aston Martin Residences is facing its second lawsuit in months.
JDS Development is dealing with possible foreclosure at Mercedes-Benz Places, raising real questions about construction timelines there.
And it's not only about deposits and delays. In just the first five months of 2026, condo associations at three newly built luxury towers filed construction defect lawsuits against their developers, covering everything from cracked concrete and water intrusion to missing amenities and fire safety issues.
None of this means pre-construction is a bad idea across the board. Industry analysts currently put only about 20% of Miami's new-construction condo projects in the "strong buy" category, with roughly half flagged as ones to avoid due to oversupply or thin underlying demand. The other 30% fall somewhere in between and require real scrutiny. The gap between a project that delivers on time with a healthy building behind it and one that ends up in the news for the wrong reasons comes down to the developer's financial standing and the specific terms in your contract, not the renderings.
How to Vet a Project Before You Sign
A few things worth checking before you put down a reservation deposit, let alone a full contract deposit:
Developer track record. Has this developer completed projects on time before? Are they financially sound, or leveraged across multiple stalled sites?
The assignment clause. Some developers allow you to sell your contract to another buyer before closing, often for a 1-2% fee. Others prohibit it entirely. If your plans could change over the 18 months to several years a project typically takes to deliver, know this answer upfront.
Financing timeline. You typically can't get a mortgage on a pre-construction unit until it's ready for occupancy, which means your deposit money (often 30-50% of the purchase price by closing) sits at risk with no loan in place for years. Portfolio and non-QM lenders can help with financing once the building is closer to delivery, but that doesn't offset the deposit exposure along the way.
Reserve and HOA fee estimates. The fees quoted in your sales documents are projections. It's not unusual for actual fees at delivery to come in 20-30% higher than what was originally estimated.
Coral Gables and Coconut Grove both have active, well-regarded projects moving through construction right now, like Ponce Park Residences and Seventeen Gables in Coral Gables or Arbor and The Well in Coconut Grove. Good projects in strong submarkets absolutely exist. The point isn't to avoid pre-construction. It's to know exactly what you're buying into before your money leaves escrow.
If you're weighing a pre-construction unit against something already built, it's worth reading through what to check before you make an offer on a resale condo too, since the reserve fund and structural inspection questions that matter for an existing building are a useful comparison point for what you're trading away (and gaining) with new construction. And once you're past the deposit stage and closer to actually closing, Miami-Dade's buyer closing costs work a little differently for pre-construction purchases than for a standard resale, so it's worth understanding both before you're comparing offers side by side.
Your specific situation, whether that's a specific building, a specific developer, or a specific unit, is going to come down to details a blog post can't cover. That's exactly the kind of question I walk clients through before they put down a reservation deposit, not after.
Frequently Asked Questions
Is my pre-construction condo deposit refundable in Miami?
It's fully refundable during the 15-day rescission period after you sign the contract and receive the condo documents. After that, it's typically non-refundable unless the developer defaults, meaning they miss the contractual delivery deadline or deliver a materially different unit than what was promised.
How much deposit do I need to buy a pre-construction condo in Miami?
Deposit schedules vary by building, but many Miami projects require 10% at contract signing, with additional installments at groundbreaking and construction milestones like top-off, totaling 30-50% of the purchase price by the time you close.
Can I sell my pre-construction contract before the building is finished?
Sometimes. This depends on the developer's assignment policy, which is spelled out in your purchase contract. Some developers allow assignment for a fee of 1-2% of the purchase price, while others prohibit it outright. Confirm this before you sign if flexibility matters to you.
What happens if the developer goes bankrupt or misses the completion deadline?
If a developer misses the Outside Date in your contract without an approved extension, you may be entitled to a full refund of your deposit, plus interest, under Florida condominium law. Your deposit's escrow protection is what makes this recovery possible, which is why confirming the developer is actually following escrow rules matters as much as the rendering on the sales website.
When do I get a mortgage for a pre-construction condo?
Typically not until the unit is ready for occupancy, which can be 18 months to several years after your initial deposit. That means your deposit dollars are at risk during construction with no loan yet in place, which is part of why vetting the developer's track record upfront matters so much.
If you're thinking through a pre-construction purchase, or trying to decide whether it's the right move compared to buying resale, I'm happy to walk you through the numbers and the specific project you're considering. Reach out anytime.
About Lynley Ciorobea
Lynley Ciorobea is a Miami-born real estate professional known for helping homeowners successfully prepare, position, and sell their homes across Coral Gables, South Miami, Pinecrest, Palmetto Bay, and the surrounding southern Miami neighborhoods. Since 2007, she has built her business around thoughtful strategy, strong negotiation, and a marketing-first approach designed to help listings stand out in an ever-evolving market.
A true local, Lynley grew up in Pinecrest and graduated from Palmer Trinity School before attending Duke University, where she earned a BA in Psychology. Her deep roots in Miami give her a nuanced understanding of the architecture, lifestyle, and character that make each neighborhood distinct. From classic Old Spanish homes in Coral Gables to newer construction in South Miami and Pinecrest, she brings a local perspective that goes far beyond surface-level market knowledge.
Over the years, Lynley has naturally become a trusted resource for homeowners preparing to sell. Many of her clients come to her long before their home ever hits the market, looking for guidance on timing, pricing, improvements, and how to position their property thoughtfully. She approaches each listing as a strategic launch rather than a simple transaction, combining market insight, negotiation experience, and elevated marketing to help sellers move forward with clarity and confidence.
As the founder of the Lynley Residential Group, Lynley remains personally involved in every listing she represents. She leads each transaction from initial strategy through closing, ensuring that every detail — from pricing and preparation to storytelling and exposure — reflects the uniqueness of the home itself. Her work often centers on architecturally interesting properties and homes where thoughtful positioning can make a meaningful difference in outcome.
Throughout her career, Lynley has consistently ranked among the top real estate agents in Miami. She has been recognized as part of EWM's Chairman's Club, placing in the top 5% of the company; in 2022 she was honored as the #2 individual agent at the company overall with $37 million in annual sales; and she's a leader in Miami with Real Broker. With more than $100 million in career transactions and more than 60 5-star Google reviews, her experience spans a wide range of property types while maintaining a strong focus on seller representation in southern Miami.
Beyond her work with clients, Lynley is known locally for her market insight and community-focused content. Through her weekly newsletter, neighborhood videos, blog posts, and social media, she shares thoughtful perspectives on the Miami real estate market and the lifestyle that surrounds it. Her approach is informative without being overwhelming, offering homeowners a clear understanding of how market conditions affect real decisions.
If you're preparing to sell a home in Coral Gables, Coconut Grove, South Miami, Pinecrest, Palmetto Bay, or nearby areas, Lynley offers a local perspective shaped by experience, relationships, and a genuine understanding of what makes Miami homes so special. Learn more at lynleyresidential.com.