Buying preconstruction in Florida: the 10/10/10/70 deposit structure, the developer contract, and the Canadian playbook

What "preconstruction" means in Florida, in 30 seconds

A preconstruction purchase in Florida is a contract to buy a residential condominium unit that does not yet exist as a separately deeded parcel. The seller is the developer, not a prior owner. The contract is signed before (sometimes well before) the building's certificate of occupancy is issued. Between signature and closing, the buyer pays the deposit in instalments and accepts the developer's customizations to the contract on plan changes, completion dates, and budget estimates. At closing, the buyer pays the balance (typically 70 % of the purchase price), receives the unit deed, and takes possession.

The product exists because developers need pre-sales to obtain construction financing. Most US lenders require a 50 % to 70 % presale level before they will fund construction on a multi-storey condominium project. The buyer's deposit therefore underwrites the project's bankability before any concrete is poured. This is the structural reason preconstruction units carry both a discount (the "floor price" on early units, often 5 % to 15 % below the eventual market price) and a real risk of delay or cancellation if the developer fails to hit the financing threshold.

Verified fact The Florida regulatory framework is built primarily on Chapter 718 of the Florida Statutes (the Condominium Act), administered by the Department of Business and Professional Regulation through its Division of Florida Condominiums, Timeshares, and Mobile Homes. The relevant operating sections for a Canadian preconstruction buyer are §718.202 (deposit escrow), §718.503 (developer disclosure and the 15-day cancellation), §718.504 (prospectus or offering circular), and, since 2022, §553.899 (milestone inspection) and §718.112(2)(g) (structural integrity reserve study). Sources: Fla. Stat. §718.202; Fla. Stat. §718.503; Fla. Stat. §718.504; Fla. Stat. §553.899.

Who is concerned, who is not

Preconstruction is one of several acquisition channels available to a Canadian buyer in Florida. It is not the right channel for every buyer.

It fits a Canadian buyer who wants a new-build product, accepts a multi-year hold before delivery, has the discipline to keep deposits liquid in USD for that period, and is comfortable financing on a foreign-national mortgage program (with the higher down-payment and reserve requirements those programs carry). It also fits an investor who wants to lock in pricing today on a building that will deliver into what they expect to be a stronger rental or resale market in two to three years.

It does not fit a buyer who needs immediate occupancy (snowbirds with a fixed retirement date in mind), who is borrowing 80 % or more (foreign-national programs rarely permit that on a new-construction condo), or who lacks the cash buffer to absorb closing-cost inflation between signing and delivery. It also does not fit a buyer who plans to use the property for short-term rental in a building that has not yet disclosed its rental policy: many newer Florida condo buildings are condotel structures (covered in the Condotel vs. condo guide) or have strict minimum-lease provisions in their declaration. Buying preconstruction before reading the declaration is a structural mistake.

Opinion For a Canadian buyer whose primary objective is a vacation home for personal use, resale preconstruction (units sold by their original preconstruction buyer before the building delivers, via assignment) often offers a better risk-adjusted entry than a fresh preconstruction contract: the building is closer to delivery, the financing window is shorter, and the original buyer is sometimes motivated to exit at or below the developer's current price list.

The 10/10/10/70 deposit structure and its variants

The 10/10/10/70 label refers to how the purchase price is paid over the life of the construction project. The most common structure in Florida for a luxury or mid-market condominium project follows this pattern:

• 10 % at reservation (contract signing). The deposit is placed in escrow under the rules described in Section 4 below.
• 10 % at groundbreaking or at a contractual date typically 4 to 8 months after reservation.
• 10 % at a construction milestone (foundation completion, structural top-off, or similar), usually 12 to 18 months after reservation.
• 70 % at closing on delivery of the unit, often 24 to 36 months after reservation.

Variants exist on essentially every parameter. The 20/20/60 structure (20 % at reservation, 20 % at milestone, 60 % at closing) accelerates cash to the developer and is sometimes offered in exchange for a small price reduction. The 5/15/15/65 structure spreads the deposit over four payments and is positioned as an accessibility play for less liquid buyers. At the ultra-luxury end of the Miami market, the 50/50 structure (50 % before construction, 50 % at closing) is used in projects where the developer has chosen to bypass conventional construction financing and rely entirely on buyer deposits.

For a Canadian buyer, the practical implication of the 10/10/10/70 structure is that 30 % of the purchase price is committed in USD over 18 months or so, and the remaining 70 % must be either paid in cash or financed at closing. Canadians who plan to finance must therefore qualify, twice, with the foreign-national lender: once at reservation (to verify the buyer can credibly close), and again at closing (because mortgage pre-approvals expire and credit, income, and assets are re-verified before funding).

Verified fact Florida law does not impose a specific deposit-instalment structure on condominium developers; the 10/10/10/70 pattern is a market convention, not a statutory requirement. What the law does regulate is how those deposits are held and when the developer may access them. Source: Fla. Stat. §718.202.

How Florida law protects your deposit (and where the protection ends)

This is the section that the original version of this guide handled imprecisely. The mechanics matter, because a Canadian buyer who reads "deposits are protected in escrow" in a sales brochure is being told a half-truth.

Fla. Stat. §718.202 establishes two distinct buckets for preconstruction deposits, governed by different rules.

The first 10 %. All payments up to 10 % of the purchase price must be placed in an escrow account held by an independent escrow agent (a Florida-licensed bank, attorney, real estate broker, or title insurer). The developer cannot serve as its own escrow agent. The deposit must remain in escrow until closing, except when the buyer properly terminates the contract (in which case the funds, plus interest, return to the buyer) or defaults (in which case they go to the developer). The director of the DBPR division may, at its discretion, accept alternative assurances such as a surety bond or an irrevocable letter of credit in lieu of cash escrow for the first 10 %. This is the genuine consumer protection: the first 10 % of the price is, in practice, your deposit.

Everything beyond 10 %. The further-payment buckets in the 10/10/10/70 structure (the second 10 %, the milestone 10 %) are deposited into a "special escrow account" by default, but the rule changes once construction begins. If the contract expressly authorizes it and the developer has begun construction, the developer may withdraw the excess-over-10 % funds and use them for "actual costs" of construction (defined as demolition, site clearing, permit fees, impact fees, utility reservation fees, and architectural, engineering, and surveying fees that directly relate to construction). The funds may not be used for salaries, commissions, advertising, marketing, loan fees, interest, attorney fees, accounting fees, or insurance. A contract that permits this withdrawal must display, in bold, conspicuous type immediately above the buyer's signature line, the legend "ANY PAYMENT IN EXCESS OF 10 PERCENT OF THE PURCHASE PRICE MADE TO DEVELOPER PRIOR TO CLOSING PURSUANT TO THIS CONTRACT MAY BE USED FOR CONSTRUCTION PURPOSES BY THE DEVELOPER."

The implication is direct. By the time you have paid 30 % of the purchase price under a typical 10/10/10/70 contract, only the first 10 % is reliably protected by independent escrow. The remaining 20 % may already have been drawn down by the developer and spent on legitimate construction costs. If the developer subsequently becomes insolvent, that 20 % is now a general claim against an estate with secured construction lenders ahead of you. Recovery is possible but slow, partial, and not guaranteed.

Verified fact A developer who wilfully fails to comply with §718.202 commits a felony of the third degree under Florida law. The failure to establish an escrow account or to place funds in it constitutes prima facie evidence of intentional violation. Sources: Fla. Stat. §718.202(7); Fla. Stat. §775.082; Fla. Stat. §775.083; Fla. Stat. §775.084.

Opinion A buyer with significant amounts in the second-and-third instalments should consider negotiating, in the contract, that the developer post a surety bond or irrevocable letter of credit covering the excess-over-10 % portion in lieu of authorising construction-cost withdrawal. Developers will resist this, but the request is consistent with the statute and is sometimes accepted in soft-market windows or by smaller developers without strong alternative financing.

The developer contract: how it differs from FAR/BAR

A Canadian buyer who has read the FAR/BAR contract guide for resale transactions will recognize almost nothing in a preconstruction developer contract. The two documents are written by different actors for different purposes.

FAR/BAR is jointly drafted by Florida Realtors and the Florida Bar to balance buyer and seller positions in a residential resale. It includes industry-standard contingencies for inspection, financing, and title, and it caps the seller's discretion to alter the property between contract and closing.

The developer contract is drafted by the developer's law firm, for the developer. It contains:

A legal description of the unit with floor plan, square footage, parking, and locker assignments. The square footage figure is usually qualified ("approximate, subject to as-built measurement"), and Florida case law has consistently held that minor variances (under 5 %) do not give rise to rescission.

The deposit schedule described in Section 3, with the §718.202 escrow legend (and, where applicable, the construction-withdrawal legend) printed conspicuously.

An estimated completion date with a tolerance margin. Industry practice in Florida is to state an estimated date and then preserve a 12-month to 24-month extension right for the developer, often triggered by force majeure events that are themselves defined broadly (hurricanes, pandemics, supply shortages, labour shortages, regulatory delay).

Authorized developer modifications, including the right to substitute materials of comparable quality (granite for quartz, one manufacturer of HVAC for another), to alter floor-plan dimensions by a stated percentage (typically up to 5 %), to relocate non-load-bearing walls, and to modify common-element finishes. These rights are extensive and largely non-negotiable for individual buyers in a 200-unit project.

Cancellation terms, generally weighted toward the developer. The standard outcome of a buyer cancellation outside the §718.503 voidability window is forfeiture of deposits, sometimes with a partial refund clause for force majeure or for documented failure of mortgage qualification (depending on the contract).

A force majeure clause broad enough to cover hurricanes, pandemics, material shortages, labour disruptions, and regulatory delay. Each of these has been invoked in Florida construction disputes since 2020.

A closing-cost allocation that typically places more costs on the buyer than the FAR/BAR default. On resale in most Florida counties, the seller pays the deed documentary stamp tax; on preconstruction, the developer usually shifts it to the buyer. See Florida documentary stamp tax for the calculation and All closing costs, itemized for the full buyer-side breakdown.

An HOA capital contribution clause, typically requiring the buyer to prepay one to three months of HOA fees plus a one-time "working capital" contribution into the new association.

For a Canadian buyer, the practical rule is that the developer contract is reviewed by your Florida attorney before signing, not by your Canadian notary or lawyer (who has no Florida licence and no exposure to these forms). A typical attorney review takes 5 to 10 hours of work and finds 3 to 5 negotiable points, even in a non-negotiable-on-its-face developer contract.

The §718.503 15-day cancellation right

Fla. Stat. §718.503 gives the buyer of a unit from a developer a statutory right to cancel the contract within 15 days. The voidability period begins on the later of two dates: the date the buyer executes the contract, and the date the buyer receives every document the developer is required to deliver under §718.503 (the prospectus or offering circular with all exhibits, the declaration of condominium, the association bylaws, the operating budget, the floor plan, the management contract, and so on). The contract must contain the 15-day legend in conspicuous type. Any purported waiver of the voidability right is of no effect.

This is the consumer protection most-often invoked in Florida preconstruction disputes. The mechanism is robust because it does not require proof of misrepresentation or breach: within the 15-day window, a buyer can cancel for any reason at all, and the developer must refund all deposits with interest.

Since 2024, an additional layer applies. For contracts executed after December 31, 2024, §718.503 requires the developer to disclose (or affirmatively state the non-applicability of) the milestone inspection report, the turnover inspection report, and the structural integrity reserve study. If the developer has produced these documents, the buyer is entitled to a current copy and a parallel 15-day voidability window keyed to their delivery. This responds directly to the post-Surfside reform program codified in SB-4D (2022) and amended in SB-154 (2023) and HB-1021 (2024).

Verified fact The Fla. Stat. §553.899 milestone inspection program, created by SB-4D and amended by SB-154 and subsequent legislation, requires a structural milestone inspection for every condominium or cooperative building three storeys or more in height, performed by December 31 of the year the building turns 30 years old (and every 10 years thereafter). Local enforcement agencies may, where local circumstances such as salt-water proximity warrant, require an earlier 25-year initial inspection. Effective July 1, 2025, the three-storey trigger refers to "habitable" storeys (parking and storage floors are excluded from the count). Source: Fla. Stat. §553.899; SB-154 (2023); HB-913 (2025).

For a Canadian buyer, the practical consequence is that the 15-day clock should be used. Many buyers sign in the developer's sales centre, accept the package of documents at the same time, and never re-read the package. The §718.503 window is the only practical opportunity to review the disclosure documents with a Florida attorney and exit the contract without penalty if material concerns appear. After 15 days, exit becomes much more expensive.

Canada ↔ Florida comparison: how the rules differ across ten provinces

There is no Florida equivalent of the Canadian provincial new-home warranty and rescission regimes most Canadian buyers are familiar with at home. The Florida framework is built entirely on Chapter 718 of the Florida Statutes (Condominium Act) and Chapter 553 (Building Construction Standards), neither of which is province-equivalent. The differences between provinces matter, because a Canadian buyer's reflexive expectations about deposit protection, rescission, and warranty coverage are set by their home province, not by Florida.

The pattern is consistent. Florida's framework is less generous than Ontario, Quebec, or BC on warranty coverage (there is no statutory equivalent of Tarion, GCR, or 2-5-10) but more generous than most provinces on the cancellation window (15 days is longer than the 7 days of REDMA and longer than the contractual-only window in Alberta or Atlantic Canada). On deposit protection, Florida is in the middle: the first 10 % is well-protected in cash escrow; everything beyond is exposed to developer drawdown for construction costs.

For a Canadian buyer, the operational consequence is that the consumer protections built into Tarion, GCR, or BC's 2-5-10 simply do not exist in Florida. The protection equivalent must be built contractually (or via the developer's limited warranty), or substituted through other risk-management tools described in Section 12 below.

Main risks for a Canadian preconstruction buyer

Delivery delay. The estimated completion date is almost always optimistic. Industry practice in Florida is to slip 6 to 18 months between the signed estimated date and the actual certificate of occupancy. The contract gives the developer extensive force majeure latitude, and Florida courts have generally enforced force majeure clauses written in favour of developers. Delay produces three direct costs to the buyer: the opportunity cost on capital tied up in escrow, the expiry of mortgage pre-approvals (requiring re-qualification at the higher rates that often prevail two years later), and the inflation of all closing-day costs (insurance premiums, property taxes, HOA fees) between signing and delivery.

Plan modification. Developers reserve broad rights to modify floor plans, finishes, and common-element layouts. A unit purchased on a 1,400 sq ft floor plan may deliver at 1,330 sq ft (the typical 5 % tolerance). Materials substitution is routine. View modifications happen when later phases of the project are revised. The buyer cannot stop these modifications mid-construction; the contract has typically authorized them at signing.

Developer bankruptcy. This is the catastrophic-tail scenario. If the developer fails before delivery, the first-10 % escrow is protected (subject to the bankruptcy-court process, which can take 12 to 36 months). Anything beyond the first 10 % that has already been released for construction-cost use is a general unsecured claim against the bankrupt estate, behind the construction lender, the mechanic's lien claimants, and any tax claims. Recovery rates in Florida condominium developer bankruptcies vary widely; partial recovery is the norm, full recovery is uncommon.

Closing-cost inflation. Between contract signing in 2024 and closing in 2026, several Florida cost lines have moved sharply. Homeowner insurance premiums in coastal South Florida have risen 30 % to 80 % depending on the building, in part driven by the post-Surfside structural reform requirements and in part by independent insurance-market conditions. HOA budgets have risen at most newer buildings to fund the structural integrity reserve study and any milestone-inspection-driven repairs. Property taxes have risen with the post-2020 valuation cycle. A Canadian buyer who underwrote the deal on 2024 cost assumptions can arrive at closing facing 25 % to 40 % higher annual carry than expected.

Appraisal gap and bear-market risk. If the Florida condo market drops during the 18-to-36-month construction window, the unit may appraise at closing below the contract price. Foreign-national mortgage programs will lend only up to a stated loan-to-value (typically 70 % to 75 %) of the appraised value, not the contract price. The buyer must either bring the gap in cash or walk away from the deposit. The same pattern played out for Toronto and Vancouver preconstruction condo buyers in 2025 and 2026, with appraisal gaps of CAD 100,000 to CAD 250,000 widely reported.

Currency exposure. The 70 % closing balance is paid in USD on a delivery date that is 18 to 36 months in the future. A 10 % move in the CAD/USD exchange rate over that period changes the Canadian buyer's effective price by CAD 35,000 to CAD 70,000 on a USD 500,000 unit. The strategies to manage this are covered in Currency hedging for cross-border real estate (chapter 09 of this manual).

Real advantages, clearly stated

Preconstruction is not a pure-risk product. The advantages that make the channel attractive are also real.

Floor price. Early-phase buyers (the first 30 % of a building's units, typically) buy at the developer's launch price list. As pre-sales progress and the developer hits its financing thresholds, the price list rises in tranches, often by 5 % to 15 % across the launch-to-completion span. The early buyer captures this appreciation, on paper, before the unit even exists.

Preferred unit choice. Early buyers select first. Floor levels, view orientations, exposures, and parking assignments all favour the early reservation. By the time a building is 70 % pre-sold, the remaining inventory is typically the lower floors, the courtyard views, and the units adjacent to the trash chute or elevator core. The 5 % to 15 % discount on the early floor price often understates the real value premium captured.

Customization. Most developers offer an upgrade catalogue (countertops, flooring, appliance package, cabinet finishes) at prices significantly below what the same upgrades would cost on aftermarket installation. The catalogue prices are not negotiated and are set to leave the developer a healthy margin, but they are cheaper than the equivalent work done in a finished unit two years later.

New construction. Building codes update on a five-to-ten-year cadence in Florida. A unit delivering in 2027 was built to the 2024 Florida Building Code, which is materially stronger on wind, flood, and structural resilience than the 2010 or 2015 codes governing most resale inventory. The insurance market reflects this: new-construction premiums in Florida are typically 25 % to 50 % below the equivalent premium on a same-square-footage unit in a 1990s-vintage building.

Deposit leverage. The 30 % cumulative deposit over 18 months is materially less front-loaded than the 25 % to 30 % down payment on a resale foreign-national mortgage, which is due in full at closing in 30 to 60 days. The cash-flow profile is friendlier to a buyer who is liquidating Canadian assets or repatriating funds through a structured FX schedule.

Developer due diligence

The single biggest risk-reduction lever a Canadian preconstruction buyer has is the choice of developer. Florida has roughly 300 active condominium developers ranging from publicly-traded national homebuilders (Lennar, PulteGroup, Toll Brothers) to family-office and single-project entities. The risk profile differs sharply.

The due-diligence questions worth answering before signing:

Track record. How many residential condominium projects has this developer delivered in Florida in the past 10 years? On time? Within their stated specifications? Project addresses are public; visiting the completed buildings and reading owner reviews on Google and Reddit costs nothing.

Financial strength. Who is the construction lender? What is the pre-sale threshold the project must hit to draw construction financing? A project that has signed its construction loan and is past the pre-sale threshold is materially safer than one still in early reservation.

Pending litigation. The Florida court system maintains public dockets searchable by entity name (Florida Courts E-Filing Portal and county clerk websites). Past project lawsuits, particularly construction-defect claims and bankruptcy filings of related entities, are flagged here.

Local reputation. Reviews from prior buyers, brokers who have transacted with the developer, and local trade press (The Real Deal South Florida, Bisnow, Miami Herald real estate section) are usable references.

Architect and general contractor. Project-quality risk lives as much with the architect of record and the GC as with the developer entity. A reputable developer working with a low-bid GC has a different risk profile than one working with a top-tier construction manager.

Permits and zoning. Has the developer obtained the full building permit, or is sale being conducted on conditional approvals? Florida county building department websites are searchable; the permit history on a specific address tells the truth.

Foreign developer status. A meaningful fraction of South Florida luxury developers are foreign-domiciled (Latin American family offices, in particular). Legal recourse against a foreign-domiciled developer in a dispute is materially more complex than against a Florida-domiciled entity. This is a factor to surface in attorney review, not necessarily a deal-killer.

From notice of completion to closing

The closing process for a preconstruction unit follows a sequence that is similar in spirit to a resale closing but compressed differently in time.

The developer issues a notice of completion typically 60 to 90 days before the projected closing date. This is the trigger event for the buyer's pre-closing obligations.

If the unit is financed, the buyer re-qualifies the mortgage. Foreign-national lenders re-verify income, assets, credit, and the source of down-payment funds. Pre-approval letters issued at reservation generally expire after 6 to 12 months and must be refreshed.

The buyer binds insurance (homeowner's policy, with the appropriate wind and flood riders for the building's location). Insurance availability and pricing should be confirmed during the §718.503 window, not at closing.

The buyer conducts a walk-through inspection with the developer's representative, generating a punch list of defects and incomplete items. Florida industry custom is for the developer to fix punch-list items within 30 to 60 days post-closing, though the contract terms govern. The list should be in writing, signed by both parties, and retained.

Closing occurs at the title company. The buyer signs the deed, the mortgage (if financed), and the closing statement. The final 70 % deposit is wired (US wires only; cross-border wires from Canadian institutions are accepted but should be initiated 5 business days ahead). The keys are handed over.

For Canadian buyers who plan to hold through an LLC, the structure should be in place before closing, not after. A post-closing transfer of the deed from the personal name to an LLC triggers the Florida documentary stamp tax a second time (typically 0.7 % of the consideration outside Miami-Dade, 0.6 % in Miami-Dade), and may trigger a "due-on-sale" clause in a financed mortgage. The trade-offs of personal name vs. LLC are detailed in Personal name vs. LLC.

Strategy for Canadians: the playbook

The risks described in Section 8 are not arguments against preconstruction. They are arguments for a specific operating posture. The playbook for a Canadian buyer is the following.

Buy in early phase, but underwrite the developer. The floor-price discount is real, but it is paid for in developer-bankruptcy risk. The two factors offset only when the developer is strong enough that bankruptcy is a low-probability outcome. For a single-project family-office developer, the calculation is different than for a Lennar or a Toll Brothers.

Keep deposits in independent escrow whenever possible. The §718.202 default places the first 10 % with an independent escrow agent. For the excess-over-10 % portions, the contract default is typically construction-cost release. Negotiate for surety-bond or letter-of-credit protection on the excess if the developer will accept; if not, accept the risk consciously and price it into the underwriting.

Plan the 70 % balance as a USD problem, not a CAD one. A forward contract or a structured FX schedule (purchasing USD in tranches over the construction window rather than all at closing) materially reduces currency risk. Canadian banks and FX brokers (HiFX, OFX, Wise, KnightsbridgeFX) all offer this. The structure should be designed at reservation, not at closing.

Do not chase appraisal gaps. If the unit appraises below the contract price at closing, the financially disciplined response is usually to walk and forfeit the deposit. Bringing 100,000 USD or more in cash to close on an asset that is now worth less than the cash being added is rarely the right trade. The exception is a buyer with a strong personal-use case and a long hold horizon, for whom the asset's mark-to-market is irrelevant to the personal-use value.

Structure for the eventual sale. The exit from a Florida preconstruction unit is governed by FIRPTA (the 15 % withholding regime applied to non-resident sellers; full detail in the FIRPTA guide) and by the Canadian-side capital gain rules (50 % inclusion in income, foreign tax credit under Article XXIV of the Canada-US Tax Convention). The holding structure (personal name, LLC, cross-border trust) materially affects how this exit unfolds. Decide before closing.

Read the declaration before signing. Many preconstruction buyers focus on the price, the floor plan, and the deposit schedule, and treat the declaration of condominium as boilerplate. It is not. The declaration governs rental restrictions, pet restrictions, modification rights, and the use of common elements. A Canadian buyer who plans to rent the unit short-term in a building whose declaration limits leases to a 6-month minimum has a problem that no contract negotiation can solve later.

Worked example

A Canadian-resident buyer signs in June 2024 to purchase a 2-bedroom condo unit in a new Hollywood, Florida tower. The contract price is USD 750,000. The deposit structure is the standard 10/10/10/70. The estimated completion date is November 2026. The unit is financed at 70 % loan-to-value (USD 525,000 loan, USD 225,000 down) under a foreign-national mortgage. The buyer plans to hold personally for at least 5 years.

Cash deployment timeline (in USD). - June 2024: USD 75,000 escrow deposit at reservation. - October 2024: USD 75,000 second instalment at groundbreaking. - August 2025: USD 75,000 third instalment at structural top-off. - Subtotal at start of closing: USD 225,000 cumulative deposit (held in escrow / released to developer per §718.202). - November 2026: USD 525,000 mortgage funding plus the buyer's closing costs.

Closing-cost estimate at delivery (Hollywood, Broward County): - Florida deed documentary stamps (typically buyer-paid in preconstruction): 750,000 × 0.007 = USD 5,250. - Intangible tax on the mortgage: 525,000 × 0.002 = USD 1,050. See Intangible tax on the mortgage. - Title insurance owner's policy (Florida promulgated rate, around USD 4,300 on a 750,000 USD policy). - Lender title insurance, settlement, recording, and miscellaneous: USD 1,800 to 2,500. - HOA capital contribution and prepayment: USD 3,000 to 5,000 typical. - Insurance binder and tax escrow: lender-dependent, USD 4,000 to 8,000 prepaid. - Total closing costs at delivery: roughly USD 19,000 to 26,000, depending on the lender and the building.

Currency conversion (illustrative, Bank of Canada noon rate). - June 2024 deposit USD 75,000 at 1.37 CAD/USD = CAD 102,750. - October 2024 deposit USD 75,000 at 1.36 = CAD 102,000. - August 2025 deposit USD 75,000 at 1.39 = CAD 104,250. - November 2026 closing wire (down payment USD 150,000 + costs USD 25,000 = USD 175,000) at 1.42 (hypothetical) = CAD 248,500. - Cumulative CAD outlay over the construction window: roughly CAD 557,500 for USD 400,000 of pre-mortgage cash deployment, plus a USD 525,000 mortgage payable in CAD-converted instalments thereafter.

The example is illustrative; actual exchange rates, closing costs, and lender requirements vary. The point is that the CAD-equivalent cost depends materially on the FX path between signing and closing, and that a 7 % FX move (which is well within historical variation over 18 months) changes the buyer's total CAD outlay by roughly CAD 40,000.

Common mistakes

Reading the marketing brochure instead of the declaration. Sales-centre brochures emphasize floor plans, amenities, and lifestyle. The declaration of condominium, the bylaws, and the operating budget contain the rules that actually govern ownership: leasing restrictions, pet rules, modification rights, and the funding mechanism for major reserves. A buyer who has not read these documents has not done the diligence.

Treating the 15-day window as administrative. The §718.503 voidability window is the single most powerful exit mechanism a preconstruction buyer has. Using it for an attorney-led review of the contract and the disclosure package is the highest-leverage 15 days in the entire transaction. Letting it lapse without action is the most common reversible mistake.

Underestimating closing-cost inflation. The buyer underwrites the deal on 2024 insurance, tax, and HOA assumptions. Two years later, those costs are 25 % to 40 % higher. The annual carry can be materially different from the spreadsheet at signing.

Misunderstanding deposit protection. "Deposits are in escrow" is true for the first 10 %, partially true for everything beyond. A buyer who treats the full 30 % cumulative deposit as escrow-protected has misread the statute.

Bringing cash to close an appraisal gap. When the unit appraises below the contract price, the disciplined response for most buyers is to forfeit the deposit rather than fund the difference in cash. Doubling down on an asset whose market value has declined is rarely the right trade.

Closing in personal name then transferring to LLC. This triggers the Florida documentary stamp tax twice and may trigger the lender's due-on-sale clause. The holding structure decision is made before signing, not after closing.

Assuming the developer's deadlines. Construction completion dates routinely slip. Mortgage pre-approvals routinely expire. A Canadian buyer whose financial plan is built on a 24-month delivery has not planned for the 36-month delivery that is at least equally common.

Preparation checklist

1. Identify the developer's track record (count of past Florida projects, on-time delivery rate, litigation history) before reservation.
2. Engage a Florida-licensed real estate attorney for contract review during the §718.503 window. Budget 5 to 10 hours of attorney time.
3. Read the declaration of condominium, the bylaws, and the operating budget. Surface any leasing, pet, or use restrictions that conflict with the intended use.
4. Confirm the deposit-escrow agent's identity and licence status. Verify they are independent of the developer.
5. Negotiate, if possible, surety-bond or letter-of-credit protection on the excess-over-10 % deposit portions.
6. Pre-qualify with a foreign-national lender at reservation, even if intending to pay cash at closing. The qualification process surfaces issues (source-of-funds documentation, FX timing) that are easier to resolve early.
7. Decide on the holding structure (personal name vs. LLC vs. cross-border trust) before closing. The decision interacts with FIRPTA, US estate tax exposure, and operational liability protection.
8. Plan the FX strategy for the 70 % balance and any further USD-denominated cash needs. Forward contracts or structured tranches both work.
9. Monitor closing-cost lines (insurance, tax, HOA) at the building level during the construction window. Re-underwrite the annual carry every 6 months.
10. At delivery, conduct the walk-through and generate a written, signed punch list. Retain it.

FAQ

Can a Canadian buy preconstruction in Florida without a US visa?

Yes. Florida imposes no immigration-status requirement on real-property ownership; the question is operational (the buyer must be physically present, or use a power of attorney, for closing). Visa rules govern the buyer's stay in the United States during construction and after delivery, but not the purchase itself.

Is preconstruction safer for cash buyers than for financed buyers?

In one dimension yes (no risk of mortgage-qualification failure at closing). In another no (cash buyers have larger absolute capital at risk, and lose more in a developer-bankruptcy or bear-market scenario). The total-risk picture is similar; the failure mode is different.

Can the §718.503 15-day cancellation be exercised after the buyer has received only some of the required documents?

Yes. The 15-day clock runs from the later of contract execution and the date of receipt of all required documents. If the developer delivers a partial package, the clock has not started. This is a meaningful protection, often missed.

Does Florida have anything equivalent to Tarion or GCR?

No. The Florida statutory framework gives a 15-day cancellation right under §718.503 and limited cash-escrow protection under §718.202, but there is no province-equivalent statutory new-home warranty fund. The developer's contractual warranty (typically 1-year workmanship, 10-year major structural) is the only material warranty most buyers will have.

Can a Canadian assign a preconstruction contract before delivery?

Sometimes. The right to assign depends entirely on the contract terms. Many developer contracts prohibit assignment entirely, or require developer consent (usually conditioned on a fee, typically 1 % to 2 % of the price). The Florida Department of Revenue takes the position that an assignment of a preconstruction contract is itself a taxable transfer subject to documentary stamps; this is a complex area and should be confirmed with counsel before any assignment.

What happens to the deposit if the buyer dies during construction?

The contract passes to the estate. The estate's executor steps into the buyer's contractual position. If the estate cannot or does not close (lack of liquidity, executor discretion, beneficiary disagreement), the contractual default consequences apply. This is one of the situations where the choice of holding structure (personal name vs. LLC vs. trust) has material consequences. See the Succession chapter for the cross-border estate-planning angle.

Does the foreign-national mortgage qualification get easier the more deposits the buyer has paid?

Marginally. Lenders look at the full cash position, not the cumulative deposit. A buyer who has paid 30 % over 18 months still must demonstrate income, reserves, and source of funds for the closing wire. The qualification process is essentially the same as for a fresh resale transaction.

What if the building delivers but the unit's market value at delivery is below the contract price?

This is the appraisal-gap scenario. The financed buyer's lender will lend only against the lower of contract price and appraised value, so the buyer must bring the gap in cash or walk. Foreign-national programs are particularly strict on this. The disciplined response in most cases is to walk and forfeit the deposit. See Section 8.