10 Things to Check Before Buying a Pre-Construction Condo in Orange Beach

Buying a pre-construction condo in Orange Beach means buying a set of documents before you can buy a building. Alabama's condominium act decides more of that transaction than the sales center does.

Here are ten things to check before signing, what a straight answer looks like, and the warning sign that should slow the pen down.

The ten checks, in short:

1. The offering statement and your clock

2. Where your deposit is held

3. Whether deposits fund construction

4. What models and renderings promise

5. The code the tower is built to

6. Flood zone and elevation certificate

7. Projected dues and budget ratification

8. Declarant control of the association

9. Rental rules and the rental program

10. What counts as finished

1. Have I been given the offering statement, and when did my clock start?

Alabama gives a pre-construction buyer a disclosure document called the offering statement. The declarant has to deliver it no later than the date of the contract of sale. Receive it fewer than seven days before you sign and you may cancel within seven days of first receiving the documents. Cancelling that way carries no penalty.

Write the delivery date on the front page the day it arrives. Ask the sales office to confirm the date in an email as well. A strong answer from a developer is a dated receipt, not a shrug about paperwork already being in the packet.

Signing at the sales center on the same visit is how the window gets lost. It is not lost, but it is short, and nobody in that room is going to remind you the clock is running.

2. Where is my deposit held, and who is holding it?

Alabama sets rules on this. A deposit for the purchase or reservation of a unit must be placed in escrow and held in Alabama. The escrow agent has to be a licensed title insurance company, a licensed title agent, an attorney, a licensed real estate broker, or an insured institution. The statute says the agent may not sit outside the state.

Ask for the escrow agent's name and the account type before you wire anything. The funds are generally held in an interest bearing account. The interest belongs to whoever ends up entitled to the principal. Get the wire instructions by phone, from a number you looked up yourself.

Alabama requires the escrow agent to sit inside the state. An answer naming an out of state agent is one for a real estate attorney, before any money moves. Treat a vague answer about where the money sits as the answer.

3. Can the developer spend my deposit before the building exists?

Sometimes, and Alabama sets the conditions. Once your cancellation window closes, and while the project is not substantially complete, a declarant may withdraw deposit money above 10 percent of the purchase price. That money pays hard costs of construction. It only works if your contract authorizes it and you meet the statute's definition of a qualified purchaser.

Look at the first page of the contract, immediately above your signature line. Alabama requires a bold legend there stating that deposits may be used by the declarant for hard costs incurred in the actual building and construction of the condominium project. The same legend has to appear in the offering statement.

The qualified purchaser test turns on income and net worth thresholds set in the statute. Whether a buyer meets it is a question for an attorney. Signing that page unread is how people authorize a draw they did not know about.

4. Does the model unit or the rendering commit the developer to anything?

Yes, more than most buyers expect. Under Alabama's condominium act, a model or a description of the condominium's physical characteristics creates an express warranty. Plans and specifications count. So does a plat or a survey describing the extent of the property. No formal warranty language is needed to create one.

Keep the brochure, the site plan, the finish schedule and photographs of the model unit. Ask for the specification list in writing rather than as a verbal walk through. A statement that a unit may be used a particular way is itself a warranty that the use is lawful.

A statement that is only an opinion or a commendation of the property does not create a warranty. That is the line a good sales agent will explain and a weak one will blur. Push any promise about the view, the amenities or the finish into writing.

5. What building code will this tower actually be built to?

Orange Beach adopts its own code editions. The city moved to the 2024 International Codes for applications submitted on or after January 1, 2026. A 2025 Coastal Construction Supplement came with them. Applications submitted through December 31, 2025 were reviewed under the 2018 International Building Code. The application date decides which applies, not the ribbon cutting.

Ask the developer for the permit application date. Check it against the city's published adoption dates. Orange Beach sets a 160 mph residential design wind speed and marks the area a windborne debris zone. For other buildings it inserts its own ultimate design wind speed at Section 1609.3.

A brochure that says built to the latest code is marketing, not a permit. The city rebates 25 percent of permit fees for a FORTIFIED HOME GOLD certification and 15 percent for LEED. A developer who has pursued neither has made a choice worth asking about.

6. What flood zone is the site in, and will there be an elevation certificate?

Flood zone drives both construction and insurance. Orange Beach uses X, AE, AO, Coastal AE and VE. It describes VE as a high risk coastal area with added hazards from storm waves over 3 feet high and fast moving water. The city keeps elevation certificate information on every development inside the Special Flood Hazard Area.

Ask the Orange Beach floodplain administrator for a written flood zone determination on the parcel. Do not read it off a map. Ask the developer whether an elevation certificate will be issued at completion. A new federal flood policy takes effect 30 days after purchase. There is no wait when it is bought while making, increasing, extending or renewing a mortgage.

A developer who treats the flood zone as a detail for closing has the order wrong. The zone shapes the parking level, the lowest occupied floor and the premium, and all three are decided long before you see a policy.

7. What has the developer projected for dues, and who ratifies the budget?

A projected budget is a projection. Alabama puts a check on it after closing. Within 30 days of adopting a proposed budget, the board must send a copy to every unit owner. It then sets a ratification meeting between ten and fifty days later. Unless a majority of owners present reject it, the budget is ratified.

Compare the projected dues against the operating budgets of comparable buildings. Buyers comparing Orange Beach realtors can ask each one how they gather those budgets. Ask what the projection assumes for master policy premiums and for reserves. Ask who covers the shortfall if the real premium lands higher.

A projected dues figure that has not moved since the renderings were drawn is the number to question. Insurance on the Alabama coast has not stood still, and the first real budget after turnover is where that catches up.

8. Who controls the association until the building sells out?

The declaration may give the developer a period of declarant control. During it, the developer appoints and removes the board. Alabama caps that period. It ends at the earliest of three triggers: sixty days after 75 percent of units are conveyed to other owners, two years after all declarants stop offering units, or two years after the last development right was exercised.

Ask where the project sits against those three triggers today. Alabama also seats owners earlier. Within ninety days of 25 percent of units being conveyed, at least one board member and a quarter of the board must be elected by other owners. That rises to a third of the board at 50 percent.

A developer appointed board still owes fiduciary care to the other unit owners under Alabama law. A board that will not release the budget is not merely being private. Slow turnover is worth noticing.

9. Will I be allowed to put this unit into a rental program?

The declaration decides whether short term rental is allowed. The developer usually has a preferred rental program too. Those are two different documents and two different questions. Renting also brings the city in. Orange Beach charges a lodging tax of 16 percent on the rental rate, made up of 10 percent city, 4 percent state and 2 percent Baldwin County.

Read the declaration's use restrictions and the rental program agreement side by side before the cancellation window closes. Ask whether the program is exclusive, how owner use is scheduled, and who is registered to remit the lodging tax. In Orange Beach and Gulf Shores, where Heather Loper & Associates works, those terms vary building by building.

A sales agent who answers with a projected annual rental figure has changed the subject. The question was whether renting is permitted and on what terms, and a projection is neither a permission nor a term.

10. What counts as finished, and what happens if the date slips?

Alabama's condominium act defines substantially completed. It means the issuance of a certificate of occupancy for the improvements, or the equivalent authorization from the governing body. Where no certificate is issued, it means substantial completion under the applicable plans and specifications. That definition matters, because deposit handling turns on it.

Find the completion language in the purchase contract and read it against that definition. Ask what remedy you have if the date moves, and whether interest on your deposit accrues or has been waived. Orange Beach issues the certificate of occupancy, so the city is the independent record of when a building is finished.

An expected delivery quarter is not a contractual date. A contract that names no outside date, and no remedy if the date passes, has answered the question by leaving it out.

Pre-Construction Versus Resale, Side by Side

The two routes into an Orange Beach condominium carry different protections under Alabama law.

Frequently Asked Questions

What is the newest condo in Orange Beach, Alabama?

Listing sites lag on this, because a tower appears in their data only once units are listed. The City of Orange Beach Building Department publishes monthly permitting reports and runs an online permit portal, which is the reliable public record of what has been approved and what is under way. Check that before a roundup post.

What happens if the developer never delivers the offering statement?

Alabama gives the buyer a remedy. If a unit is conveyed and the required documents were never delivered, the purchaser may elect to receive an amount equal to 5 percent of the sales price of the unit. The election has to be given in writing within six months of the date of conveyance, and it replaces other damages claims.

Can I resell my contract before the building is finished?

It depends entirely on the purchase contract. Some developers prohibit assignment outright, some allow it with written consent and a fee, and some allow it only after a certain point in construction. The clause is in the contract and the offering statement, and it is easier to negotiate before signing than after.

Will I have to carry flood insurance on a new Orange Beach condo?

Probably, if the building sits in a high risk zone and the loan is federally backed. Orange Beach notes that in communities taking part in the National Flood Insurance Program, buildings in high risk flood zones with federally backed mortgages must carry it. The city also notes a 30 day waiting period. That wait does not apply when the policy is bought while making, increasing, extending or renewing a mortgage.

Who inspects the building before anyone can move in?

The Orange Beach Building Division. It enforces the adopted building codes and the city's Flood Damage Prevention Ordinance through permitting and inspection, and the city issues the certificate of occupancy. The floodplain administrator is also the building official, so flood and structural review sit in the same office.

Read the documents before the sales center reads them to you

Heather Loper & Associates works Orange Beach and Gulf Shores and can sit with a buyer through the offering statement, the declaration and the rental terms before a deposit moves. Buyers comparing the top realtors in Orange Beach should expect the documents to come first and the renderings second.