A week before closing on a $1.1 million unit in a West Palm Beach tower still under construction, a buyer asked a real estate forum a plain question: is my deposit actually safe. He already knew the marketing language. Deposits held in escrow. Protected by Florida law. What he wanted to know was harder to answer. How much of the money he'd already wired, and the money still due before closing, sat somewhere truly untouchable if the project stalled.
The answer split his deposit into two categories nobody at the sales gallery had walked him through separately. Ten percent of his purchase price, $110,000 on that unit, is required by Florida law to sit in an escrow account the developer cannot spend before closing. Everything above that line lives under a different rule entirely, one that most preconstruction buyers along West Palm Beach's Flagler corridor don't discover until they're already three deposits into a schedule that can run for years.
What the Statute Actually Locks Down
Florida Statute 718.202 governs how developers handle buyer payments before a condominium is substantially complete. Up to 10 percent of the purchase price has to go into escrow and stay there until closing, unless the contract specifically permits the developer to use it for construction. That floor doesn't move by building or by buyer. On a unit at Olara, where pricing starts around $2 million, that's roughly $200,000 legally required to sit untouched. On a unit at South Flagler House, where prices run from $7.9 million to $73 million, the protected floor ranges from about $790,000 to more than $7 million.
Above that line, the statute allows something buyers often miss on first read. Deposits collected beyond the first 10 percent can be spent on actual construction costs if the purchase contract says so, and most contracts do say so. That's not a defect in the paperwork. It's how developers fund a multi-year build without carrying the entire cost on a construction loan alone. But it means the comfort of "my deposit is escrowed" only covers a fraction of what a buyer typically has at risk by the time a tower tops out.
Where the Other 90 Percent Actually Goes
Deposit schedules at Flagler corridor towers aren't standardized, and the public information on any given building isn't always consistent with itself.
| Tower | Entry pricing | Deposit path reported before closing |
|---|---|---|
| South Flagler House | From $7.9 million | One published schedule: 20% at signing, 10% at groundbreaking, 10% when construction reaches the buyer's floor, the remaining 60% due at closing |
| Olara | From roughly $2 million | One source lists a total deposit obligation of 50% of the purchase price paid across construction milestones; another public listing for the same building describes a 20% initial deposit with the balance tied to progress |
That gap isn't a case of one source being wrong. Preconstruction contracts aren't uniform even within a single building. Terms can shift depending on when in the sales cycle a buyer signs, whether they negotiated, and which release phase their unit came from. Developers commonly release units in tiers, starting with early access pricing, then broker pricing, then public launch, and the deposit schedule itself is sometimes part of what gets negotiated for buyers who come in early. The brochure describes a typical buyer. The purchase agreement describes you, and it's the only document that actually controls what happens to your money.
The Clock That Doesn't Start When You Think
Florida Statute 718.503 gives buyers of a new condominium from a developer 15 days to void the contract and get a full refund. The part buyers most often misread is when that clock begins. It starts on receipt of the complete document package, the Public Offering Statement, condominium documents, association bylaws, and escrow agreement, not on the day you sign. If a developer delivers those documents late, the 15 days haven't started yet even if you signed weeks earlier.
There's a second window buyers rarely plan for. If a developer later makes a change to the offering that materially harms the buyer, a fresh 15-day rescission period can open at that point. Over builds that stretch across multiple years, that matters. South Flagler House topped out in November 2025 and is targeting 2027 completion. Olara began vertical construction in December 2025, with delivery of its first residences targeted for later in 2026 and full completion extending into 2028. Floor plans get adjusted, finish packages get substituted, delivery dates slide. Each adverse change can reopen a review window. It doesn't reopen your whole contract, but it's a right that's easy to miss if nobody tells you it exists.
What a Funded Construction Loan Actually Tells You
The single clearest signal that a project is more than a sales gallery and a set of renderings is whether its construction loan has actually closed. Related Ross secured $600 million in construction financing for South Flagler House in June 2025, a $475 million senior loan from Bank OZK alongside a $125 million mezzanine loan from GoldenTree Asset Management and TZ Capital. The tower topped out five months later. Savanna closed a $380 million construction facility for Olara in March 2025, and vertical construction began that December.
That kind of financing means a lender with its own underwriting team has already run completion risk before ever wiring a dollar. A buyer can ask a sales office directly whether the construction loan has closed and who the lender is. If a project is still in presales without a funded construction loan, the buyer's deposit is effectively financing the developer's feasibility study, not a building that's already been vetted by a bank.
Before You Wire the Next Deposit
A short list worth working through with an attorney before any check leaves your account:
- What percentage of my total deposit is protected in escrow under Florida law, stated in dollars, not just percent
- Has the construction loan closed, and who is the lender
- Is my deposit schedule tied to construction milestones like groundbreaking and topping off, or to fixed calendar dates
- What date did my 15-day rescission clock actually start, based on when I received the complete document package
- What counts as a material adverse amendment under my specific contract, and does it clearly reopen a new rescission window
Questions Worth Asking the Sales Office
If a project never breaks ground, do I get my whole deposit back automatically? Not automatically. Florida law requires the funds to sit in escrow and be returned if the project isn't completed, but the mechanics of that return run through your specific contract and escrow agreement, not a blanket state guarantee. That's the document an attorney should review line by line before the first deposit goes out.
Does buying earlier in a building's sales cycle change my protections? The 10 percent statutory floor and the 15-day rescission window apply the same way no matter when you buy. What can differ by phase is everything above that floor, since early buyers sometimes have more room to negotiate deposit percentages and timing than buyers who come in during public launch.
How long is the typical wait between deposit and closing at these towers? It depends entirely on when construction started. South Flagler House topped out in November 2025 and targets 2027. Olara started vertical construction in December 2025 with deliveries planned into 2028. Gaps measured in years, not months, are exactly why the deposit schedule and the rescission timeline matter more here than they would on a home that's already built.
Preconstruction along West Palm Beach's Flagler corridor is one of the more active corners of the South Florida market right now, and the contracts behind it are written by developer attorneys to move the project forward, not to make the buyer's exposure obvious. If you're weighing a unit at one of these towers, or comparing preconstruction against resale elsewhere in the area, Engel & Völkers Fort Lauderdale can walk through what a specific building's deposit structure and timeline actually mean for your situation. Contact us before your next deposit is due.
