Quick Read Summary (TLDR)

Getting out of preconstruction real estate contracts in Florida is possible via several legal exits available to buyers if circumstances change. Florida law grants specific rescission rights for condominium and homeowners association purchases, often based on receiving required disclosures.

Beyond Florida’s statutes, buyers can cancel preconstruction real estate contracts based on contractual clauses like financing contingencies or federal protections under the Interstate Land Sales Full Disclosure Act (ILSA).

Given the complexity, consulting an experienced real estate attorney beats “going it alone” when attempting contract cancellation and protecting deposits.

Reach out to the attorneys of South Florida Law by calling (954) 900-8885 or via our contact form.

Purchasing a preconstruction property in Florida can be an exciting investment, but circumstances sometimes change before closing. Fortunately, Florida law provides several legal pathways for buyers to exit preconstruction real estate contracts under specific conditions. Understanding these options can help property buyers protect their deposits and avoid unwanted commitments.

Statutory Rescission Rights for Condominium Purchases

Florida provides strong protections for buyers of preconstruction condominiums through Florida Statute 718.503. This law grants buyers a 15-day rescission period that begins after two important conditions are met: the buyer signs the purchase agreement and receives all required disclosure documents from the developer. These disclosure documents include the declaration of condominium, association bylaws, estimated operating budgets, management contracts, and various other materials that reveal the true nature of the investment.

The 15-day cancellation window is not a one-time opportunity. If the developer makes any material changes to the offering that adversely affect the buyer, the statute provides an additional 15-day rescission period starting from when the buyer receives notice of those changes. This protection ensures buyers can respond to significant modifications in the project’s scope, design, or financial structure. Importantly, buyers cannot waive these rescission rights, and the rights remain valid until closing occurs.

Homeowners Association Disclosure Requirements

For preconstruction homes that fall under homeowners association governance rather than condominium law, Florida Statute 720.401 establishes different but equally important protections. Developers and sellers must provide prospective buyers with an HOA Disclosure Summary before the purchase contract is executed. This disclosure informs buyers about membership obligations, restrictive covenants, assessment requirements, and potential liens for non-payment.

When developers fail to provide this disclosure before contract signing, buyers receive a powerful cancellation right. The statute allows buyers to void the contract by delivering written notice within three days after receiving the disclosure or prior to closing, whichever comes first. This right cannot be waived and terminates only when the closing is completed.

Contractual Grounds for Cancellation

Beyond statutory protections, many preconstruction contracts contain provisions that permit cancellation under specific circumstances. Force Majeure clauses allow parties to exit contracts when performance becomes impossible due to events beyond their control, such as natural disasters, extreme weather, hurricanes, floods, or acts of terrorism. During the uncertainty created by such events, buyers may have legitimate grounds to terminate agreements without penalty.

Financing contingencies provide another common exit route. When lenders withdraw loan commitments at the last minute—a situation that can occur when economic conditions shift or property values decline—buyers typically cannot complete the purchase. In these situations, the buyer’s inability to secure financing provides lawful grounds for contract cancellation and deposit recovery.

Federal Protections Under the Interstate Land Sales Full Disclosure Act

Beyond state law, the federal Interstate Land Sales Full Disclosure Act provides additional avenues for exiting preconstruction contracts. Congress enacted ILSA in 1968 to protect consumers from fraud in interstate land sales, and the law specifically applies to condominium units, which are considered “lots” under the statute. ILSA requires developers to register qualifying subdivisions with the Consumer Financial Protection Bureau and provide detailed property reports to purchasers.

When developers violate ILSA’s registration, disclosure, or anti-fraud provisions, buyers may have grounds to rescind their contracts. The two-year completion exemption is particularly relevant for preconstruction properties. If a developer claims this exemption but fails to complete construction within two years of contract signing, buyers may be entitled to cancellation and deposit recovery. ILSA violations can result in buyers recovering their full deposits plus interest, making it a powerful tool when developers fail to meet federal requirements.

Understanding Rescission and Common Law Grounds

Rescission is the legal mechanism that “unmakes” a contract, treating it as if it never existed. Florida common law requires that rescission return both parties to their original positions before the agreement was formed. Several grounds support contract rescission even when contracts lack explicit cancellation clauses.

Fraud provides one of the strongest grounds for cancellation. When developers knowingly provide false information about material property characteristics or conceal significant defects, buyers can seek rescission both before and after closing. Material mistakes that affect fundamental aspects of the transaction also justify contract cancellation. Additionally, title defects that sellers cannot cure before closing permit buyers to exit agreements and recover deposits.

“Fraud provides one of the strongest grounds for [preconstruction real estate contract] cancellation.”

The Importance of an Attorney

Preconstruction contract cancellations involve complex legal analysis of both federal and state law. Florida Statutes Chapters 718 and 720 contain detailed requirements that developers must follow, and violations of these statutes can create cancellation opportunities. Similarly, ILSA compliance demands careful examination of developer disclosures, completion timelines, and registration requirements.

Buyers considering contract cancellation should consult with experienced Florida real estate attorneys before taking action. Legal professionals can identify violations, evaluate the strength of potential claims, gather necessary evidence, and ensure compliance with notification deadlines. Attempting to exit preconstruction contracts without proper legal guidance can result in lost deposits, breach of contract liability, and forfeited rights.

South Florida Law

The best time to reach out to an experienced real estate attorney is prior to signing a preconstruction contract. The second best time is when you need to get out of the contract. In either case, the real estate attorneys of South Florida Law can protect your rights and ensure your best interests are met.

Our attorneys have years of experience in handling Florida real estate disputes including helping our clients get out of preconstruction real estate contracts. Having our attorneys at your side in any real estate dispute gives you the advantage of legal protection that you simply would not have if you attempted to “go it alone.”

Trying to get out of a preconstruction real estate contract in the State of Florida? Call us today at (954) 900-8885 or reach out to us via our contact form.