---
id: "concept-construction-bond"
type: "concept"
source_timestamps: ["00:02:50", "00:03:10"]
tags: ["risk-management", "insurance", "financing"]
related: ["concept-florida-condo-deposit-financing"]
definition: "A surety bond purchased by a developer to insure a buyer's deposit when those funds are utilized for construction."
sources: ["jayroberts"]
sourceVaultSlug: "jay-roberts-florida-condo-development-2026Jun25"
originDay: 4
---
# Construction Deposit Bond

## Construction Deposit Bond

**Definition:** A surety bond purchased by a developer to insure a buyer's deposit when those funds are utilized for construction.

In the context of Florida condo development (see [[concept-florida-condo-deposit-financing]]), a bond purchased by the developer to protect the buyer's deposit when those funds are released from escrow and used for construction. If the developer fails to deliver the condominium, the bond ensures the buyer gets their deposit back.

### Economics

[[entity-jay-roberts]] notes that the cost of this bond is roughly **2% of the bonded amount**. This is a small carrying cost that unlocks massive leverage by freeing up millions in deposit capital that would otherwise be trapped in escrow.

### Regulatory Anchor

Florida Statute §718.202 specifies that when initial 10% deposits are released for construction use, the aggregate amount must be backed by a **surety bond or irrevocable letter of credit**. The bond is not optional — it is the statutory price of liberating deposit capital.

### Why It Matters

Without the bond mechanism, the entire developer-friendly ROI advantage that powers Roberts's business model (see [[claim-florida-roi-advantage]]) would collapse. The bond is the regulatory bridge that lets buyer protection and developer leverage coexist.