You signed a contract to purchase a pre-construction condominium or new home. Now you cannot close, and the developer is threatening to keep your deposit—and demand additional money.
Can a developer recover more than your deposit in Florida?
Sometimes. Your deposit is not automatically the maximum amount you can lose. The answer depends on your purchase agreement, whether an enforceable provision limits the developer’s remedies, and whether the developer can establish a legal basis for additional recovery.
Before you assume that walking away ends your obligations, review the entire contract and any default notice with a Florida real estate deposit dispute attorney.
Start With the Buyer Default Clause
The default provision is often the starting point for evaluating your exposure. Look for language addressing:
- Liquidated damages.
- Actual damages.
- Sole or exclusive remedies.
- Deposits paid or required to be paid.
- Additional deposit installments.
- Attorney’s fees, costs, and interest.
- Notice requirements and opportunities to cure.
- Resale procedures and damage calculations.
- Mediation, arbitration, or litigation.
Read these provisions together. A paragraph stating that the developer may retain a deposit may not explain whether that remedy is exclusive or whether a separate obligation survives termination.
Also check which version governs. Addenda and later amendments may change the original default language.
When Liquidated Damages May Limit Recovery
Liquidated damages are an agreed amount intended to compensate for a breach. An enforceable clause making the deposit the developer’s exclusive damages remedy may cap contractual damages, subject to its wording and separate obligations.
However, calling a payment “liquidated damages” does not make the clause enforceable.
An invalid liquidated damages clause does not automatically eliminate the buyer’s liability.
When Actual Damages May Exceed the Deposit
Where actual damages are available, Florida’s ordinary measure compares the contract price with fair market value when the buyer breached, credits prior payments, and permits qualifying additional proven losses. The seller must also establish performance or ability to perform the obligations necessary for closing.
Amounts that reasonable mitigation could have avoided may be excluded. A demand letter alone does not establish recoverable damages.
A Simplified Example of Potential Exposure
Suppose a buyer agrees to pay $1,000,000 and pays a $100,000 deposit. The developer later demands $180,000 in total damages.
The practical questions include:
- Does the contract permit that claim?
- Is $180,000 supported by the applicable damages calculation?
- Does it include amounts already covered by another charge?
- Has the developer credited the $100,000 already paid?
- Are fees or interest being claimed separately?
If $180,000 were ultimately established as recoverable damages before crediting the deposit, the additional damages balance would be $80,000. This hypothetical illustrates deposit accounting; it does not establish what a developer could recover in a particular case.
Can the Developer Collect Deposits You Never Paid?
Do not assume that your exposure ends with money already in escrow.
For example, a buyer might pay an initial installment but fail to make a later scheduled deposit. A clause addressing deposits “paid” may raise different issues from one addressing deposits “paid or agreed to be paid.”
An attorney should examine whether the developer is seeking an unpaid contractual installment, damages for failing to close, or both. The agreement’s termination provisions and the enforceability of the requested remedy matter.
What If the Developer Resells the Unit?
Ask for the resale contract, closing statement, transaction dates, concessions, and supporting accounting.
The headline resale price may omit credits, upgrades, commissions, or other adjustments. Conversely, a developer’s claimed loss may include expenses that require closer examination.
The purchase agreement may also contain a specific resale formula, deadline, or deemed resale price. If so, determine exactly when that provision applies and whether the developer followed it.
A resale should prompt a careful review of the developer’s calculation rather than an assumption that either side automatically wins.
Can Attorney’s Fees Push the Demand Above the Deposit?
Review the attorney’s fee provision separately from the damages clause. A demand above your deposit may combine several categories: damages, unpaid installments, attorney’s fees, costs, and interest.
For each category, ask the developer to identify its contractual or statutory basis and explain the calculation. A damages limitation may not resolve every fee issue.
This distinction also matters when negotiating a settlement. An agreement addressing only the deposit may leave disagreement about other requested amounts.
What If the Developer Was Also in Default?
A developer’s accusation does not settle whether you breached the agreement.
Your attorney should review the closing timeline, required notices, project status, promised performance, amendments, and communications. Relevant questions may include:
- Was the developer entitled to require closing on the stated date?
- Did it send notice in the manner the contract required?
- Was an applicable cure period provided?
- Had you exercised a valid contractual or statutory cancellation right?
- Did an extension or other written agreement change your obligations?
Likewise, financing problems should be evaluated against the actual financing contingency, if any. Do not assume that a lender’s refusal automatically permits cancellation.
What to Do If a Developer Demands More Money
Preserve Your Documents
Keep the purchase agreement, amendments, disclosures, deposit receipts, escrow statements, closing notices, financing records, and communications. Preserve the envelope or delivery information for important notices.
Request an Itemized Explanation
Ask which provisions authorize the demand, how the claimed damages were calculated, and how your deposits were credited. Request supporting records, including relevant resale documents.
Have Deadlines Reviewed Promptly
A default notice, arbitration demand, and lawsuit involve different response requirements. Obtain advice promptly so an approaching deadline does not limit your options.
Get Any Resolution in Writing
If you negotiate a walkaway agreement, make sure it clearly addresses the deposit, unpaid installments, additional damages, fees, costs, and any release of claims. Confirm who must sign and what obligations remain.
Frequently Asked Questions
Is my deposit automatically the most I can lose?
No. The amount at risk depends on the contract, enforceability of its remedies, and the facts supporting the claim.
Does a “nonrefundable” deposit mean the developer cannot sue me?
That label alone does not answer whether the developer has additional remedies. Review the default and limitation provisions together.
Should I pay the additional amount in a demand letter?
Have the demand and supporting documents reviewed before agreeing to payment or signing an acknowledgment of liability.
Can I negotiate to surrender my deposit and end the dispute?
You can propose that resolution. Whether it is advisable depends on your exposure and available defenses. A signed agreement should clearly state what claims and obligations it resolves.
Speak With a Florida Real Estate Deposit Dispute Attorney
If a developer is threatening to keep your deposit and pursue additional money, understand your potential exposure before responding.
J.P. Gonzalez-Sirgo, P.A. represents buyers in Florida real estate deposit disputes, including disputes involving pre-construction condominiums. Attorney J.P. Gonzalez-Sirgo has more than 30 years of legal experience.
Contact Florida Attorney J.P. Gonzalez-Sirgo by dialing his direct number at (786) 272-5841, calling the main office at (305) 461-1095, or Toll Free at 1 (866) 71-CLAIM or email Miami Attorney Gonzalez-Sirgo directly at jp@yourattorneys.com or by text at (305) 929-8935.
This article is for informational purposes only and does not constitute legal advice.
