Navigating the Deposit Structure in Miami’s Pre-Construction Projects
Quick Summary
- Expect 40–50% total deposits before closing, paid in stages tied to milestones
- Florida law protects the first 10% in escrow; review how any additional funds may be used
- Reservation is typically refundable; deposits harden after the 15‑day rescission period
- Align liquidity, reminders, and lender strategy early to avoid default
- Confirm assignment rights, fees, and timing before you sign
What Miami Pre‑Construction Deposits Really Are
Buying into a pre‑construction condominium in Miami is a deliberate, multi‑step financial commitment. Instead of one down payment at closing, you will make several deposits that track the development’s progress. This tiered structure lets you secure a residence and price today while the tower is designed, financed, and built. For discerning buyers in Brickell, Downtown, and Miami-beach, clarity around how each installment works, when it becomes non‑refundable, and what sits in escrow is the difference between a smooth experience and unnecessary friction.
At its core, the deposit structure is a map. You start with a nominal reservation to hold a specific line or view, advance to a contract deposit once the developer releases the offering documents, then continue with milestone deposits at key construction events. By the time the structure tops off, it is common to have placed an aggregate 40–50% of the purchase price into escrow, with the balance due at closing. The cadence is not arbitrary. It reflects lender expectations, reduces speculative churn, and signals your intent to perform. For high‑profile properties like St. Regis® Residences Sunny Isles, The Perigon Miami Beach, or Bentley Residences Sunny Isles, those staged commitments are part of the project’s discipline.
From a lifestyle perspective, the structure is also a planning tool. It allows you to align liquidity over 18 to 24 months while your residence takes shape. When used well, it becomes a calm, predictable rhythm of wires that brings you closer to a turn‑key home with the view and finish palette you selected. MILLION understands that this is not merely a transaction; it is the commissioning of a personal living environment. Your deposit plan should respect that level of intent.
A Typical Timeline From Reservation to Closing
Reservation. The journey often begins with a simple reservation deposit, typically a modest flat figure credited at contract. This secures a specific stack or exposure early in the sales cycle and gives you priority while the developer finalizes offering materials. Because the reservation is non‑binding, it is commonly refundable if either party elects not to proceed. For many buyers, this is a low‑friction way to lock the exact view while you and your counsel review the draft terms and preliminary budgets.
Contract deposit and rescission. After the developer releases the full condominium package and you sign the purchase agreement, the first major deposit is due. Many projects bring the cumulative deposit to roughly 20–30% at this stage, often with 10% due upon execution. Florida provides a 15‑day rescission period after you receive all required documents. Use it. In that window, your attorney can test every assumption: the budget, association reserves, completion timeline, finish schedules, and change‑order allowances. If anything materially diverges from what was presented, you may cancel within that period and receive a full refund.
Milestone deposits. Additional installments are called at defined construction events. Depending on the project, you might see a payment at foundation completion, another at a mid‑rise benchmark, and one at structural top‑off. Each installment is often around 10% of the purchase price, though the percentages and intervals vary by development and market conditions. The aggregate effect is clear. By top‑off, many buyers will have funded 40–50% in escrow, with the remainder due upon delivery.
Completion and closing. Closing occurs when the residence is delivered and the condominium receives its certificate of occupancy. Any end‑loan is drawn at that time because lenders typically do not fund an unbuilt unit. Expect customary closing items in addition to the price balance, including title charges, prorations, and initial association contributions that capitalize the building’s operating and reserve accounts. After closing, deposits convert into equity and you transition from purchaser to owner.
This arc commonly spans 18 to 24 months in Miami, though iconic towers with complex construction or permitting can extend beyond that. The takeaway is pacing. Organize your finances, calendar the dates, and treat each wire as a deliberate step in a well‑sequenced process.
Escrow, Legal Safeguards, and How to Read Them
Florida’s condominium statute is explicit about how developers must handle buyer funds. The first 10% of the purchase price you pay is required to remain in escrow until closing. That tranche cannot be used for construction. Deposits above that initial 10% are also placed in escrow, but whether they can be drawn for construction depends on the contract language. Most sophisticated developer agreements include a bold disclosure authorizing the use of amounts over the first 10% for project costs. If that clause is absent, the default is that all deposits remain untouched in escrow until closing.
As a buyer, you should confirm three things early: the identity of the escrow agent, the account instructions for your wires, and whether the account is interest‑bearing. If interest is paid, the agreement should specify who receives it. You are entitled to clarity. A reputable sales team will provide written escrow instructions and verification of receipt for each transfer.
Your 15‑day rescission right at contract is a second key safeguard. After that window closes, deposits generally become non‑refundable unless the developer defaults or a contractual contingency is triggered. Common developer obligations include substantial completion by an outside date and delivery of a residence that is not materially different from the one advertised. If a project fails outright, your protected escrow should be refunded pursuant to statute and the governing documents. The practical risk lives in any amounts properly drawn for construction if the contract allowed it, which is one reason buyers value proven sponsors and lender‑backed capital stacks.
Finally, understand liquidated damages. Most Miami developer contracts provide that if a buyer defaults after the rescission period, the deposits constitute the developer’s sole remedy. In plain terms, if you walk away late or miss a payment without cure, you should expect to forfeit deposits paid to date. That clarity cuts both ways. It protects the developer from prolonged disputes and keeps your exposure defined, provided you meet your obligations.
Strategy: Align Liquidity, Calendar, Assignment, and Financing
Liquidity planning. Banks will not fund milestone deposits. These installments are paid from cash, lines of credit, or planned liquidity events. Build a simple schedule that aligns capital sources with dates. Many buyers dedicate a project‑specific account to pre‑construction wires and preload it ahead of each milestone to remove day‑of stress. International purchasers should add time for transfers and exchange conversions so funds post before the deadline.
Calendar discipline. Treat the deposit schedule as non‑negotiable. Enter every date in your calendar with multiple reminders. Notify your private banker that large wires will be requested on those dates and pre‑clear transfer limits. If you travel frequently, designate a co‑signer or establish power of attorney so a payment can be released on time without you being physically present. A single missed installment can trigger default provisions. Precision is your friend.
Verification of progress. Milestone deposits correspond to construction achievements. Expect formal notices and progress communications from the developer. Some contracts specify third‑party architect or engineer certifications before a call for funds. If you have questions, ask for the substantiation. Clear reporting maintains trust and helps you anticipate delivery timing.
Engage the right advisors. A Miami real estate attorney experienced in new development will navigate escrow nuances, rescission mechanics, default remedies, and assignment language. An advisor who lives in the market will benchmark your schedule against comparable projects, flag negotiation opportunities that occasionally appear early in a cycle, and keep you ahead of documentation. That professional guidance transforms a complex process into a quiet routine.
Consider assignment early. If there is any chance you will prefer to transfer your contract before closing, resolve assignment rights before you sign. Some luxury developers prohibit assignments entirely to preserve an end‑user community. Others allow transfers with developer consent and a fee, or only after certain sales thresholds are met. The details affect capital planning. If assignments are permitted, an assignee typically reimburses all deposits you have paid and approves developer forms. If assignment is barred, your exit is to close and then resell, which entails a new set of costs and timing considerations. Align your strategy with the language, not the assumption.
Financing readiness. Even if you plan to finance only at delivery, begin lender conversations once the building is meaningfully underway. Pre‑qualification, asset documentation, and any structuring for complex income or international holdings take time. Extended‑lock programs can hedge interest‑rate volatility. The goal is to arrive at closing with approvals in hand, not with a crash‑course in underwriting as your tower receives its certificate of occupancy.
Project examples and how deposit structures vary. Branded and trophy addresses often sit at the higher end of total pre‑closing deposits, both to meet construction lender requirements and to signal commitment. For instance, the elegance of The Perigon Miami Beach and the amenity program at Bentley Residences Sunny Isles exemplify buildings where staged payments emphasize buyer alignment with long‑lead construction. Ultra‑select waterfront offerings like St. Regis® Residences Sunny Isles may employ similar multi‑installment calendars. Meanwhile, a larger mid‑market tower might settle closer to 30% before closing with a cadence designed to broaden accessibility. The principle remains constant. Your deposits are paced to construction, and your preparation converts that pace into calm execution.
Putting It All Together
The Miami pre‑construction deposit structure is not a hurdle. It is a framework that balances opportunity and obligation, giving you early access to the region’s most desirable inventory while providing developers the capital visibility they need to build. Respect the map, read the protections, and choreograph your liquidity so each installment is both timely and uneventful. The payoff is a residence delivered to your specifications in a city that rewards foresight and taste.
If you value simplicity, assemble your team first. An attorney to parse escrow and assignment terms. A banker to pre‑clear wires and discuss end‑loan options. A market‑savvy advisor to guide project selection and negotiation. With those pieces in place, your deposit timeline becomes a curated sequence rather than a series of deadlines. The same mindset that commissions a yacht or a piece of art applies here. Patience, confidence, and meticulous attention to detail yield a living space that is precisely yours.
MILLION’s clients often remark that the process felt quieter than expected. That is the objective. A calm wire calendar. Transparent escrow confirmations. Progress updates that complement rather than intrude on your life. When your keys are finally placed in your hand, the deposits that once looked complex will feel like the natural cadence of creating a home in a city you love.
FAQs
What total deposit should I budget before closing? In Miami, many luxury projects require an aggregate of approximately 40–50% of the purchase price before closing, paid in several installments tied to construction milestones.
How protected are my deposits in escrow? The first 10% of the price must remain in escrow until closing. Use of deposits above that amount depends on your contract. Most agreements authorize draws for construction, disclosed prominently in the documents.
Can I cancel if I change my mind after signing? Yes. Florida provides a 15‑day rescission period after you sign and receive the full offering materials. Within that window you may cancel for any reason and receive a full refund.
Do developers allow assignment of my contract? Policies vary. Some prohibit assignments, others allow them with approval and a fee. If assignment flexibility matters, negotiate it before you sign and understand any timing or resale conditions.
What other costs should I expect at closing? In addition to the remaining balance, plan for title charges, prorations, and initial condominium contributions that fund operating and reserve accounts. Your lender will draw the mortgage at closing if you finance.
For tailored guidance on aligning your deposit plan with the right project and view, connect with our team at MILLION Luxury.
Million Luxury
Million Luxury
Welcome to MILLION, an exclusive luxury real estate boutique nestled in the heart of South Florida’s most desirable locations. Specializing in high-end properties, we provide a sanctuary for discerning clients including top Fortune 500 executives, affluent families, celebrities, and professional athletes from across the globe. At MILLION, we understand the unique demands of our elite clientele and offer a seamless blend of confidentiality and personalized attention. Our commitment to privacy is unwavering; we ensure that every transaction and interaction is handled with the utmost discretion and according to stringent confidentiality protocols. Our concierge service embodies the pinnacle of white-glove care, offering tailored assistance that transcends traditional real estate support.
