Pre-Construction Condos in Miami: How Buying Off-Plan Works

How pre-construction condos in Miami work

In a pre-construction (or “off-plan”) purchase, you sign a contract with the developer for a unit that has not been built yet, usually based on floor plans, renderings and a list of finishes. You pay a series of deposits during construction and the balance at closing, once the building receives its certificate of occupancy and the unit is ready.

From launch to completion, a high-rise project in Miami commonly takes three to four years or more, depending on the size of the tower, permitting and when construction actually begins. Prices are typically lowest in the early phases and tend to rise as the project sells and advances.

Step by step: reservation, contract and deposits

Many projects begin with a reservation: a refundable or partially refundable amount that holds a specific unit or a place in line while the developer prepares contracts. Policies vary, so confirm in writing whether and when a reservation is refundable.

Next comes the purchase contract, along with the condominium documents. Once you sign, the deposit schedule begins. Schedules vary widely by project and are negotiated in some cases, but a common structure in Miami spreads 40% to 50% of the price across several payments before completion, with the remainder due at closing.

• Typical example: 10% at contract, 10% at a later milestone (e.g. groundbreaking), 10% at another milestone (e.g. a certain floor or top-off), 10% later in construction and 50% at closing.
• Other projects ask for 20% to 30% before closing, or offer different structures for international buyers.
• Always read the exact schedule and triggers in your contract; they are not standardized.

Florida protections: escrow and the 15-day right to cancel

Florida law provides specific protections for buyers of new condominium units. Under Florida Statute 718.202, deposits up to 10% of the purchase price must be held in an escrow account by a qualified escrow agent. Amounts above 10% may be used by the developer for construction costs only if the contract expressly allows it and certain statutory conditions are met; otherwise they must also remain in escrow.

Under Florida Statute 718.503, a buyer of a new condo from a developer generally has 15 days after signing the contract, or after receiving all required condominium documents (whichever is later), to cancel the contract and receive a full refund of deposits. Use that window to read the documents carefully, ideally with a Florida real-estate attorney.

Protections depend on how the contract and documents are drafted, and the statutes are amended from time to time, so do not rely on general summaries alone.

Reading the developer’s prospectus and condo documents

Developers must provide a set of condominium documents, which typically include the prospectus or offering circular, the declaration of condominium, bylaws, the estimated operating budget, floor plans and other disclosures. They are long, but they are where the real terms live.

Pay particular attention to the right the developer reserves to change plans, finishes or unit sizes, how square footage is measured, the estimated HOA budget, rental restrictions, and what happens if completion is delayed.

• Estimated monthly HOA fees and what they assume
• Rental and leasing rules (minimum terms, short-term restrictions)
• Developer’s rights to modify the project
• Outside completion date and remedies for delay
• Assignment policy and fees

Completion timelines and delays

Delays are common in construction everywhere, and Miami is no exception. Permitting, labor, material costs, weather and hurricanes can all push back completion. Contracts usually give the developer an estimated completion date plus an outside date, often with extensions for events beyond their control.

Understand what your contract says if the outside date is missed, and plan your finances so that a delay of a year or more would not create a problem for you.

Assignments: selling your contract before closing

An assignment means transferring your purchase contract to another buyer before closing, typically to capture appreciation without closing yourself. It is a well-known strategy in Miami, but it is not guaranteed.

Many developers restrict assignments, prohibit them until a high percentage of the project is sold, require their approval, or charge an assignment fee. Some also restrict marketing an assignment on the MLS. If assigning is part of your plan, confirm the policy in the contract before you sign, and talk to a tax advisor about how a gain would be taxed.

Pros and risks of pre-construction condos in Miami

Pre-construction can make sense for buyers with a medium- to long-term horizon who value new construction and a gradual payment plan. It also carries risks that a resale purchase does not, so weigh both sides honestly.

S&S Real Estate Miami’s bilingual advisors can walk you through the deposit schedule, documents and track record of specific projects so you can compare options side by side.

• Pro: potential price appreciation between contract and completion (not guaranteed).
• Pro: brand-new building, modern design and current building codes.
• Pro: payments spread over the construction period.
• Risk: construction delays and changes to the project.
• Risk: market conditions may change before closing.
• Risk: you must qualify for financing at closing if you are not paying cash.
• Risk: final HOA fees, insurance and taxes are estimates until the building operates.

Financing at closing: plan early

Most pre-construction buyers do not get a mortgage when they sign. Financing is arranged near completion, which means you must qualify under the lending rules, interest rates and appraisal values in effect at closing, not those of today.

If you cannot obtain a loan or the appraisal comes in below your price, you may need to cover the difference in cash or risk losing your deposits. Some developers work with lenders that finance foreign buyers in their buildings, but terms vary. Our guide to foreign national mortgages in Miami covers the details.

Disclaimer

This guide is for general information only and is not legal, tax or financial advice. Statutes, deposit structures and developer policies change and differ by project. Review every contract and condominium document with a qualified Florida real-estate attorney before signing.