Florida Statute 718.202 | Lawyer Caselaw & Research

The 2024 Florida Statutes

Title XL
REAL AND PERSONAL PROPERTY

Chapter 718
CONDOMINIUMS

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F.S. 718.202

718.202 Sales or reservation deposits prior to closing.—

(1) If a developer contracts to sell a condominium parcel and the construction, furnishing, and landscaping of the property submitted or proposed to be submitted to condominium ownership has not been substantially completed in accordance with the plans and specifications and representations made by the developer in the disclosures required by this chapter, the developer shall pay into an escrow account all payments up to 10 percent of the sale price received by the developer from the buyer towards the sale price. The escrow agent shall give to the purchaser a receipt for the deposit, upon request. In lieu of the foregoing concerning residential condominiums, the division director has the discretion to accept other assurances, including, but not limited to, a surety bond or an irrevocable letter of credit in an amount equal to the escrow requirements of this section. With respect to nonresidential condominiums, the developer may deliver to the escrow agent a surety bond or an irrevocable letter of credit in an amount equivalent to the aggregate of some or all of all payments, up to 10 percent of the sale price, received by the developer from all buyers toward the sale price. In all cases, the aggregate of the initial 10 percent deposits being released must be secured by a surety bond or irrevocable letter of credit in an equivalent amount. Default determinations and refund of deposits shall be governed by the escrow release provision of this subsection. Funds shall be released from escrow as follows:

(a) If a buyer properly terminates the contract pursuant to its terms or pursuant to this chapter, the funds shall be paid to the buyer together with any interest earned.

(b) If the buyer defaults in the performance of his or her obligations under the contract of purchase and sale, the funds shall be paid to the developer together with any interest earned.

(c) If the contract does not provide for the payment of any interest earned on the escrowed funds, interest shall be paid to the developer at the closing of the transaction.

(d) If the funds of a buyer have not been previously disbursed in accordance with the provisions of this subsection, they may be disbursed to the developer by the escrow agent at the closing of the transaction, unless prior to the disbursement the escrow agent receives from the buyer written notice of a dispute between the buyer and developer.

(2) All payments which are in excess of the 10 percent of the sale price described in subsection (1) and which have been received prior to completion of construction by the developer from the buyer on a contract for purchase of a condominium parcel shall be held in a special escrow account established as provided in subsection (1) and controlled by an escrow agent and may not be used by the developer prior to closing the transaction, except as provided in subsection (3) or except for refund to the buyer. If the money remains in this special account for more than 3 months and earns interest, the interest shall be paid as provided in subsection (1).

¹(3) If the contract for sale of the condominium unit so provides, the developer may withdraw escrow funds in excess of 10 percent of the purchase price from the special account required by subsection (2) when the construction of improvements has begun. He or she may use the funds for the actual costs incurred by the developer in the construction and development of the condominium property, or the easements and rights appurtenant thereto, in which the unit to be sold is located. For purposes of this subsection, the term “actual costs” includes, but is not limited to, expenditures for demolition, site clearing, permit fees, impact fees, and utility reservation fees, as well as architectural, engineering, and surveying fees that directly relate to construction and development of the condominium property or the easements and rights appurtenant thereto. However, no part of these funds may be used for salaries, commissions, or expenses of salespersons; for advertising, marketing, or promotional purposes; or for loan fees and costs, principal and interest on loans, attorney fees, accounting fees, or insurance costs. A contract that permits use of the advance payments for these purposes must include the following legend conspicuously printed or stamped in boldfaced type on the first page of the contract and immediately above the place for the signature of the buyer: “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.”

(4) The term “completion of construction” means issuance of a certificate of occupancy for the entire building or improvement, or the equivalent authorization issued by the governmental body having jurisdiction, and, in a jurisdiction where no certificate of occupancy or equivalent authorization is issued, it means substantial completion of construction, finishing, and equipping of the building or improvements according to the plans and specifications.

(5) The failure to comply with the provisions of this section renders the contract voidable by the buyer, and, if voided, all sums deposited or advanced under the contract shall be refunded with interest at the highest rate then being paid on savings accounts, excluding certificates of deposit, by savings and loan associations in the area in which the condominium property is located.

(6) If a developer enters into a reservation agreement, the developer shall pay into an escrow account all reservation deposit payments. Reservation deposits shall be payable to the escrow agent, who shall give to the prospective purchaser a receipt for the deposit, acknowledging that the deposit is being held pursuant to the requirements of this subsection. The funds may be placed in either interest-bearing or non-interest-bearing accounts, provided that the funds shall at all reasonable times be available for withdrawal in full by the escrow agent. The developer shall maintain separate records for each condominium or proposed condominium for which deposits are being accepted. Upon written request to the escrow agent by the prospective purchaser or developer, the funds shall be immediately and without qualification refunded in full to the prospective purchaser. Upon such refund, any interest shall be paid to the prospective purchaser, unless otherwise provided in the reservation agreement. A reservation deposit shall not be released directly to the developer except as a down payment on the purchase price simultaneously with or subsequent to the execution of a contract. Upon the execution of a purchase agreement for a unit, any funds paid by the purchaser as a deposit to reserve the unit pursuant to a reservation agreement, and any interest thereon, shall cease to be subject to the provisions of this subsection and shall instead be subject to the provisions of subsections (1)-(5).

(7) Any developer who willfully fails to comply with the provisions of this section concerning establishment of an escrow account, deposits of funds into escrow, and withdrawal of funds from escrow is guilty of a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084, or the successor thereof. The failure to establish an escrow account or to place funds in an escrow account is prima facie evidence of an intentional and purposeful violation of this section.

(8) Every escrow account required by this section shall be established with a bank; a savings and loan association; an attorney who is a member of The Florida Bar; a real estate broker registered under chapter 475; a title insurer authorized to do business in this state, acting through either its employees or a title insurance agent licensed under chapter 626; or any financial lending institution having a net worth in excess of $5 million. The escrow agent shall not be located outside the state unless, pursuant to the escrow agreement, the escrow agent submits to the jurisdiction of the division and the courts of this state for any cause of action arising from the escrow. Every escrow agent shall be independent of the developer, and no developer or any officer, director, affiliate, subsidiary, or employee of a developer may serve as escrow agent. Escrow funds may be invested only in securities of the United States or an agency thereof or in accounts in institutions the deposits of which are insured by an agency of the United States.

(9) Any developer who is subject to the provisions of this section is not subject to the provisions of s. 501.1375.

(10) Nothing in this section shall be construed to require any filing with the division in the case of condominiums other than residential condominiums.

(11) All funds deposited into escrow pursuant to subsection (1) or subsection (2) may be held in one or more escrow accounts by the escrow agent. If only one escrow account is used, the escrow agent must maintain separate accounting records for each purchaser and for amounts separately covered under subsections (1) and (2) and, if applicable, released to the developer pursuant to subsection (3). Separate accounting by the escrow agent of the escrow funds constitutes compliance with this section even if the funds are held by the escrow agent in a single escrow account. It is the intent of this subsection to clarify existing law.

History.—s. 1, ch. 76-222; s. 7, ch. 79-314; s. 3, ch. 80-323; s. 3, ch. 81-185; s. 9, ch. 84-368; s. 5, ch. 87-117; s. 14, ch. 90-151; s. 860, ch. 97-102; s. 14, ch. 2010-174; s. 10, ch. 2021-99; s. 16, ch. 2024-244.

¹Note.—Section 31, ch. 2024-244, provides that “[t]he amendments made to ss. 718.103(14) and 718.202(3) and s. 718.407(1), (2), and (6), Florida Statutes, as created by this act, are intended to clarify existing law and shall apply retroactively. However, such amendments do not revive or reinstate any right or interest that has been fully and finally adjudicated as invalid before October 1, 2024.”

F.S. 718.202 on Google Scholar

F.S. 718.202 on Casetext

Amendments to 718.202

Arrestable Offenses / Crimes under Fla. Stat. 718.202

Level: Degree
Misdemeanor/Felony: First/Second/Third

S718.202 - EMBEZZLE - CONDOMINIUM DEVELOPER FTC ESCROW ACCOUNT REQ - F: T

Annotations, Discussions, Cases:

Cases Citing Statute 718.202

Total Results: 20

STEPHEN HESS v. PMG-S2 SUNNY ISLES, LLC

Court: Fla. Dist. Ct. App. | Date Filed: 2023-10-04T00:00:00-07:00

Snippet: against PMG for recission pursuant to sections 718.202 and 718.506, Florida Statutes, breach of contract…breach of contract or for rescission under sections 718.202 and 718.506, Florida Statutes (2018). The Assignment

STEPHEN HESS v. PMG-S2 SUNNY ISLES, LLC

Court: Fla. Dist. Ct. App. | Date Filed: 2022-11-09T23:53:00-08:00

Snippet: against PMG for recission pursuant to sections 718.202 and 718.506, Florida Statutes, breach of contract

STEPHEN HESS v. PMG-S2 SUNNY ISLES, LLC

Court: Fla. Dist. Ct. App. | Date Filed: 2022-08-10T00:53:00-07:00

Snippet: against PMG for recission pursuant to sections 718.202 and 718.506, Florida Statutes, breach of contract

North Carillon, LLC v. CRC 603, LLC

Court: Fla. | Date Filed: 2014-01-23T00:00:00-08:00

Citation: 135 So. 3d 274, 39 Fla. L. Weekly Supp. 39, 2014 WL 241918, 2014 Fla. LEXIS 200

Snippet: offense — a felony of the third degree. Section 718.202, Florida Statutes (2006), sets forth the pertinent… (Emphasis added.) In brief, section 718.202(1) requires the payment “into an escrow account… to 10 percent of the sale price,” and section 718.202(2) provides that payments “which are in excess …) and controlled by the escrow agent.” Section 718.202(5) provides that the “failure to comply with the…the contract voidable by the buyer,” and section 718.202(7) provides that a “developer who willfully fails

Jackson v. Palms of Perdido, LLC

Court: Fla. Dist. Ct. App. | Date Filed: 2013-01-04T00:00:00-08:00

Citation: 107 So. 3d 446, 2013 WL 45866, 2013 Fla. App. LEXIS 200

Snippet: for breach of contract and violations of section 718.202, Florida Statutes. We affirm the trial court’s …Jacksons assert that The Palms violated section 718.202, Florida Statutes, which governs the use and protection… 2d DCA 1984) (“The obvious purpose of section 718.202 is to protect purchasers under preconstruction …Jacksons’ statutory claim. We note that section 718.202 does not make clear how courts are to handle situations…reversing entry of summary judgment on section 718.202 claim where question of default timing was disputed

Daneri v. Bcre Brickell, LLC

Court: Fla. Dist. Ct. App. | Date Filed: 2012-01-04T00:00:00-08:00

Citation: 79 So. 3d 91, 2012 Fla. App. LEXIS 32, 2012 WL 10850

Snippet: fact that affect whether BCRE adhered to section 718.202, Florida Statutes (2008). The record suggests BCRE…should be voided because BCRE violated section 718.202. The trial court entered final summary judgment…this case requires the Court to interpret section 718.202, which imposes requirements upon developers who…from the buyer towards the sale price." § 718.202(1). The statute then states that "funds shall…defaults under the contract; or c) the sale closes. § 718.202(1)(a); (b); (d). As to the remainder of the deposit

CRC 603, LLC v. North Carillon, LLC

Court: Fla. Dist. Ct. App. | Date Filed: 2011-09-07T00:00:00-07:00

Citation: 77 So. 3d 655, 2011 Fla. App. LEXIS 14137, 2011 WL 3916151

Snippet: escrow agent violated the requirements of section 718.202, Florida Statutes (2006). These appeals only raise…developer and the escrow agent violated section 718.202, Florida Statutes, “when they established a single… [Appellants] argue that the requirements of § 718.202 are met by a “separate accounting” of the funds…escrowed deposits satisfies the requirements of § 718.202, the district court found that the accounting practices…without indicating which funds are protected under § 718.202(1). Thus, regardless of whether the statute requires

Winkler v. Lawyers Title Insurance Corp.

Court: Fla. Dist. Ct. App. | Date Filed: 2010-08-04T00:00:00-07:00

Citation: 41 So. 3d 414, 2010 Fla. App. LEXIS 11266, 2010 WL 3023370

Snippet: serving as escrow agent in accordance with section 718.202, Florida Statutes. None of the relevant documents

Hardwick Properties, Inc. v. Newbern

Court: Fla. Dist. Ct. App. | Date Filed: 1998-02-25T23:53:00-08:00

Citation: 711 So. 2d 35

Snippet: accordance with the Escrow Agreement and Section 718.202, Florida Statutes, and this Agreement shall be

Buccaneer's Roost Ltd. v. Weaver

Court: Fla. Dist. Ct. App. | Date Filed: 1992-11-06T00:00:00-08:00

Citation: 608 So. 2d 893, 1992 Fla. App. LEXIS 11368, 1992 WL 317850

Snippet: rescission based upon an alleged violation of section 718.202, Florida Statutes (1989), which regulates the escrow

N & C PROPERTIES v. Vanguard Bank & Trust Co.

Court: Fla. Dist. Ct. App. | Date Filed: 1988-01-21T23:53:00-08:00

Citation: 519 So. 2d 1048

Snippet: contracts pursuant to section 718.503 and section 718.202, Florida Statutes, which allow a contract to be…together with any interest earned. See section 718.202(1)(a), Florida Statutes. N & C's argument

Clone, Inc. v. Orr

Court: Fla. Dist. Ct. App. | Date Filed: 1985-09-05T00:53:00-07:00

Citation: 476 So. 2d 1300

Snippet: , or agreements for purchase and sale. Section 718.202 refers to "contracts" for sale prior

Barrack v. State

Court: Fla. Dist. Ct. App. | Date Filed: 1985-01-16T00:00:00-08:00

Citation: 462 So. 2d 1196, 10 Fla. L. Weekly 192, 1985 Fla. App. LEXIS 11964

Snippet: such use, contrary to F.S. 718.202(2), F.S. 718.202(3), and F.S. 718.202(7). We note that no statute …section 718.202(7), Florida Statutes (1979). We uphold the constitutionality of section 718.202, but reverse… purposes which were not authorized by section 718.202. The appellant, therefore, qualified as a condominium…approved escrow account as required by section 718.202, although construction, furnishing, and landscaping…appellant complains that the provisions of section 718.202 violate due process because they are ambiguous

Asbury Arms Devel. v. Florida Dept. of Bus.

Court: Fla. Dist. Ct. App. | Date Filed: 1984-10-03T00:53:00-07:00

Citation: 456 So. 2d 1291

Snippet: together with interest thereon as provided in s. 718.202. The contract may be terminated by written notice

Schwartz v. Lincoln Construction & Development Corp.

Court: Fla. Dist. Ct. App. | Date Filed: 1984-09-11T00:00:00-07:00

Citation: 455 So. 2d 612, 9 Fla. L. Weekly 1959, 1984 Fla. App. LEXIS 14829

Snippet: into an escrow account as required by Section 718.202(1), Florida Statutes (1983), (3) the proposed units

FLORIDA COMMUNITIES HUTCHINSON ISL. v. Arabia

Court: Fla. Dist. Ct. App. | Date Filed: 1984-07-18T00:53:00-07:00

Citation: 452 So. 2d 1131

Snippet: that the trial court had authority under section 718.202, Florida Statutes (1983) to require the petitioners…reviewed respondent's argument under section 718.202, Florida Statutes (1983) and find it meritless.

First Sarasota Service Corp. v. Miller

Court: Fla. Dist. Ct. App. | Date Filed: 1984-05-04T00:53:00-07:00

Citation: 450 So. 2d 875

Snippet: closing, the escrow agent, pursuant to section 718.202(1)(b), Florida Statutes (1981), determined that…between them and the developer pursuant to section 718.202(1)(d). They further contended that the escrow agent… to avoid their agreements pursuant to section 718.202(5). The matter came before the court on the purchasers…the escrow agent and developer violated section 718.202(1)(d), since prior to the disbursement of funds… parties. The court further found that section 718.202(5) rendered the purchase agreements voidable and

Finst Dev., Inc. v. Bemaor

Court: Fla. Dist. Ct. App. | Date Filed: 1984-03-06T00:00:00-08:00

Citation: 449 So. 2d 292, 1984 Fla. App. LEXIS 12110

Snippet: provisions of the Florida Condominium Act, §§ 718.202, 718.-503, 718.504, Fla.Stat. (1981), and the Federal

Sun Bank of Miami v. Lester

Court: Fla. Dist. Ct. App. | Date Filed: 1981-09-08T00:53:00-07:00

Citation: 404 So. 2d 141

Snippet: deposit was available for use by the developer as § 718.202, Florida Statutes (1979) requires that the entire

Ago

Court: Fla. Att'y Gen. | Date Filed: 1979-04-25T23:53:00-08:00

Snippet: evidently include conveyancing purposes. Section 718.202, F. S., impliedly authorizes the developer to sell…which the unit to be sold is located. While s. 718.202 imposes certain requirements on a developer who…legal description `for all purposes,' and s. 718.202(2) and (3), F. S., providing a method of handling…contents of the condominium declaration and s. 718.202, concerning sales deposits prior to closing. (However…those specifically contained in ss. 718.104 and 718.202. AS TO QUESTION 2: Your second question asks what