JournalNew-Construction Contracts in Miami: What to Review Before You Deposit
Pre-construction purchases in Miami involve contracts drafted by developers, not by neutral parties. Understanding the provisions that typically matter most helps buyers ask the right questions and engage the right professionals.
Miami New Realty
Miami has been one of the most active pre-construction condominium markets in the United States, attracting buyers from across the country and around the world. Purchasing a unit before a building is complete is a fundamentally different transaction from buying an existing resale property, one governed by a developer's contract drafted to protect the developer's interests. Buyers who engage a qualified real-estate attorney before signing, and who understand the provisions that most commonly affect outcomes, are better positioned than those who treat the sales center as the primary source of information.
The Condominium Purchase Agreement
A developer's purchase agreement is a long-form legal document. It is not a standard Florida Realtors form. The agreement typically defines the purchase price, the deposit structure, delivery timelines, what the developer can modify about the unit or building before delivery, and what remedies (if any) the buyer has. Florida's Condominium Act provides certain statutory protections for condo buyers, including a rescission period in most cases, but the specifics depend on the type of offering, the developer's compliance with registration requirements, and other factors. Review the Condominium Public Offering Statement (or Prospectus) carefully; it is a required disclosure document with substantial information about the project, the association's projected budget, and the developer's background.
Deposit Structure and Escrow
Pre-construction deposits in Miami can be significant, often structured as a percentage of the purchase price paid in stages over the construction timeline. Florida law includes provisions governing how these deposits must be handled, but the specifics of escrowed versus non-escrowed deposit treatment are important to understand. Ask who holds the deposits, under what conditions they are returned or forfeited, and what the developer's financial obligations are to the project. A real-estate attorney familiar with Florida condominium law should review these provisions before you write a check.
Delivery Timelines and Developer Flexibility
Pre-construction contracts typically give developers broad flexibility to adjust delivery timelines. Construction delays are common, and most contracts allow for extensions of a year or more before a buyer gains any right to exit. Understand how the contract defines 'completion,' when your closing obligation triggers, and what happens if your financial situation or the financing environment changes between signing and closing, which may be years away. Interest rate lock commitments from lenders generally cannot span the length of a construction cycle.
Unit Modifications and Material Changes
Developer contracts often reserve the right to make changes to unit finishes, floor plans, amenities, and building features before delivery, subject to conditions defined in the contract. What you saw in the model may not be precisely what you receive. Understand what the contract defines as a material change (which may give you exit rights) versus a permitted substitution (which does not). Specifications, finishes, and appliance selections should be documented clearly and attached to the agreement.
Closing Costs and Post-Closing Obligations
New-construction closings in Miami often carry additional costs that resale buyers do not encounter: developer closing cost contributions (or obligations to pay them), transfer taxes structured differently than in resale, and post-closing obligations like the purchase of the initial period's condo reserve funding. Understand what you will owe at closing beyond the purchase price, and budget accordingly. Your attorney and your lender should both review the closing cost estimate provided by the developer's title company.
Pre-Construction Buyer's Review Checklist
- Engage a Florida real-estate attorney before signing any developer agreement
- Review the Condominium Public Offering Statement / Prospectus in full
- Understand the deposit schedule, escrow terms, and refund conditions
- Clarify how long the developer can delay delivery before you have exit rights
- Document all unit specifications, finishes, and included features in writing
- Understand what constitutes a 'material change' under the contract
- Review all post-closing cost obligations and build them into your budget
- Ask your lender about financing timeline and rate-lock limitations for pre-construction
- Verify the developer's track record and project financing independently
Pre-construction purchases can offer meaningful opportunities in Miami's market, but the risks and complexities differ substantially from resale transactions. The best protection available to a buyer is a qualified real-estate attorney who has reviewed many similar contracts and can identify provisions that are uncommonly adverse. The sales center is not a substitute for independent legal counsel.
Contact the team