Your pre-construction deposit: escrow and the 15-day right to cancel

In Florida, the deposit you pay on a pre-construction condo does not go straight to the developer. The state condominium law requires deposits to be held by an independent escrow agent and gives buyers 15 days to cancel after signing and receiving the documents. Knowing how both rules work lets you sign with a clearer picture.

What escrow means

Escrow is an account held by a neutral third party, who keeps the money until the conditions of the contract are met. In pre-construction sales the escrow agent is usually a law firm, a title company or a bank. The law requires the agent to be independent of the developer and its affiliates (Florida Statutes, section 718.202).

The 10% rule

Under section 718.202, payments up to 10% of the purchase price must be held in escrow. Anything above 10% goes into a special escrow account. If the contract allows it, the developer may use that portion above 10% once construction has begun, but only for actual construction and development costs. The statute does not allow those funds to pay for sales commissions, advertising, loan costs, legal or accounting fees, or insurance.

When a contract allows this use, it must say so in a conspicuous legend. With a payment plan such as 10/20/10/60, part of your deposits can go into construction before delivery. That is common and permitted by law, and it is worth knowing before you sign.

A reservation is not a contract

Many launches start with reservations before contracts exist. The law treats a reservation deposit differently: it must be held in escrow and refunded in full, without conditions, when the prospective buyer asks the escrow agent in writing (718.202). It only becomes a down payment when you sign the purchase contract.

The 15-day right to cancel

Section 718.503 lets a buyer of a residential unit sold by the developer cancel the contract in writing within 15 days after signing and receiving all the required documents, such as the declaration of condominium, the estimated budget and the prospectus. The contract must state this right in capital letters, and any waiver of it has no effect.

The 15-day window also reopens if the developer delivers an amendment that materially changes the offering in a way that is adverse to the buyer. Budget changes caused by cost increases are treated by the statute as estimates and generally do not trigger that right.

Use those days to read the documents carefully. It is the right time to have a Florida real estate attorney review the contract and to check the payment schedule, the estimated delivery date and the building's rental rules.

After the 15 days

Once the window closes, the contract terms govern. In most pre-construction contracts, if the buyer misses an installment or does not close, the developer may keep the deposits. Section 718.202 itself provides for this when the buyer is in default. Before signing, build a realistic plan for each installment and for closing.

Be careful with wire instructions

Wire fraud with fake bank details is common in real estate. Before sending any funds, confirm the instructions by phone directly with the escrow agent, using a number you found yourself, never by email alone. Keep the wire confirmation and ask for an escrow receipt for every payment.

How I help

I track the contract and installment deadlines with you and connect you with real estate attorneys and the escrow agent so your questions are answered before each step. This article is educational and is not a substitute for advice from an attorney.

Frequently asked questions

Is a reservation deposit refundable?

Yes. Under section 718.202, while there is no signed contract, a reservation deposit must be refunded in full when you ask the escrow agent in writing.

Can I cancel after the 15 days?

Generally the right under section 718.503 ends when the window closes. The exception is a material amendment adverse to the buyer, which opens a new 15-day window. Otherwise the contract terms govern; speak with an attorney.

Who keeps the escrow interest?

It depends on the contract. Under the statute, if the buyer properly cancels, interest goes back to the buyer with the deposit; if the buyer defaults, it goes to the developer; if the contract is silent, it goes to the developer at closing.

Sources: Florida Statutes 718.202 and 718.503 (2025 edition, Florida Senate), reviewed October 2026.