Getting in on a new residential opportunity in one of the world’s hottest markets can feel like a deal that’s too good to pass up. Buying a pre-construction condo in Miami can mean you gain access to sought-after buildings before they’re completed, lock in pricing early, and are able to customize finishes or layouts to your liking.
But while the renderings and amenities often receive the most attention, this is your reminder that the purchase contract deserves just as much (if not more) scrutiny.
Unlike many residential resale contracts, pre-construction agreements are drafted by the developer and are not negotiated jointly between buyer and seller. That means these contracts are designed to protect the developer’s interests (not yours!), and they often contain provisions that significantly affect a buyer’s rights, timeline, and financial obligations.
Before signing a pre-construction condo contract, enlist a real estate attorney to help you understand your rights and to ensure you don’t overlook these critical clauses.
Overlooked Clauses in Pre-Construction Condo Contracts
Estimated completion dates and force majeure clauses – Many buyers assume the projected completion date listed in marketing materials is more or less guaranteed. Spoiler alert: it usually isn’t. Most developer contracts include language allowing substantial flexibility if construction is delayed due to permitting, labor shortages, supply chain issues, weather events (force majeure), or other circumstances beyond the developer’s control. While delays aren’t unusual in large-scale construction projects, buyers should understand exactly how long the developer has to complete the project and under what circumstances additional delays are permitted.
Deposit requirements and escrow – Pre-construction purchases typically require multiple deposits throughout construction. For example, instead of paying one earnest money deposit, buyers may be required to submit an initial reservation or contract deposit, additional deposits at specified construction milestones, and a final balance at closing. Understanding when and under what circumstances deposits become non-refundable is critical before committing substantial funds.
Understanding Deposit Escrow Protections – Florida law offers some protection here. Under Fla. Stat. § 718.202, developers generally can’t treat buyer deposits as general operating funds as the money has to be held in escrow rather than spent freely before closing. That said, the statute also allows developers to access a portion of escrowed funds earlier for construction costs under certain conditions, such as posting a bond or obtaining buyer consent, so “in escrow” doesn’t always mean the full deposit sits untouched until closing. Before signing, buyers should ask the developer or their attorney exactly how the escrow account is structured, whether any portion of the deposit can be released early for construction, and what happens to your money if the project is delayed indefinitely, canceled, or the developer defaults. These answers vary by contract and by developer, and they matter far more than the size of the deposit itself.
Floor plans, finishes, and amenity alterations – The beautiful model unit may not perfectly reflect the finished product you get to live in. Many contracts allow developers to make reasonable modifications to unit sizes, floor plans, balcony layouts, appliances, materials and finishes, etc. Some changes are minor, while others may materially affect the property’s value or functionality. Reading the contract helps buyers understand what changes are contractually permitted and when and whether you have the right to cancel.
Assignment restrictions – Some buyers purchase pre-construction units with the intention of assigning the contract before closing but be wary. Many developer agreements restrict or prohibit assignments altogether. Others allow assignments only after certain construction milestones have been reached or require developer approval and additional fees. If flexibility is part of your investment strategy, these provisions deserve careful attention.
Closing costs and closing contingencies – Many first-time pre-construction buyers focus primarily on the purchase price, only to discover that they may be responsible for expenses that aren’t always common in traditional resale transactions, including developer closing fees, capital contribution fees, association startup fees, among others. Moreover, new developments come with “as-is” closings, which means there is little-to-no room for negotiation if there are finish discrepancies.
Why Legal Review Matters
Pre-construction contracts are lengthy, detailed, and heavily weighted toward the developer. That doesn’t necessarily make them unfair, but it does mean buyers should fully understand what they’re agreeing to before signing.
An experienced Florida real estate attorney can review the contract, explain key provisions, identify potential areas of concern, and help buyers understand their rights and obligations before substantial deposits become committed.
At the Law Offices of Alex D. Sirulnik, P.A. and ADS Title Services, Inc., we help buyers review pre-construction contracts, evaluate title and closing issues, and navigate complex real estate transactions throughout South Florida.
FAQs:
Q: Are pre-construction condo contracts in Miami negotiable? Pre-construction contracts are drafted by the developer, not negotiated jointly, so they’re written to protect the developer’s interests. An attorney can still help identify which provisions carry the most risk before you sign.
Q: What happens if my pre-construction condo’s completion date is delayed? Most developer contracts include force majeure language allowing flexibility for delays caused by permitting, labor shortages, supply chain issues, or weather events. Buyers should understand exactly how long the developer has to complete the project.
Q: Are pre-construction condo deposits refundable? It depends on the contract. Buyers typically submit multiple deposits throughout construction, and understanding when those deposits become non-refundable, and under what circumstances, is critical before committing funds.
Q: Can a developer change the floor plan or finishes after I sign? Many contracts allow developers to make reasonable modifications to unit sizes, layouts, appliances, or finishes. Some changes are minor; others can materially affect the property’s value, so it’s important to know what’s permitted.
Q: Can I assign my pre-construction condo contract to someone else? Some developer agreements restrict or prohibit assignments altogether, while others allow them only after certain milestones or with developer approval and added fees.
Before signing a developer contract, contact our team to ensure you understand exactly what you’re purchasing and how to protect your investment from day one.
