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Senate Bill 264 (2023): Interests of Foreign Countries

SENATE BILL 264 (2023): INTERESTS OF FOREIGN COUNTRIES

Florida Governor Ron DeSantis signed Senate Bill 264, Interests of Foreign Countries, which is effective July 1, 2023. In part, it limits and regulates the sale, purchase, and ownership of certain properties in Florida by foreign principals, persons, and entities defined in Chapter 692, Part III, Florida Statutes.

The sections of the new law that impact the real estate industry are summarized in the Florida Realtors®’ Flowcharts and Memorandum. Various state agencies are required to implement specific portions of the bill, so many details regarding the law’s application, implementation, and interpretation are still unknown.

THIS IS A SUMMARY OF A VERY COMPLICATED LAW – PARTIES TO REAL ESTATE TRANSACTIONS AND REALTORS® SHOULD CONSULT WITH AN ATTORNEY REGARDING HOW THIS NEW LAW MAY IMPACT THEIR LEGAL RIGHTS AND RESPONSIBILITIES. 

Updated December 21, 2023.

RESOURCES:

LITIGATION UPDATES:

  • A group of Chinese citizens who live, work, study, and raise families in Florida, as well as a real estate brokerage firm in Florida that primarily serves clients of Chinese descent (the “plaintiffs”), filed a lawsuit to combat Florida’s discriminatory property law, SB 264, on May 22, 2023.
  • The judge denied the plaintiffs’ motion for an injunction, which would have paused the enforcement of the law pending the outcome of the lawsuit. Plaintiffs appealed, the parties have briefed and that appeal is still pending.
  • Follow the status of the litigation here.

“FOREIGN COUNTRY OF CONCERN” DEFINED IN SB 264:

  • People’s Republic of China (“PRC” or “China”)
  • Russian Federation
  • Islamic Republic of Iran
  • Democratic People’s Republic of Korea (“North Korea”)
  • Republic of Cuba
  • Venezuelan regime of Nicolás Maduro
  • Syrian Arab Republic

“FOREIGN PRINCIPAL” DEFINED IN SB 264:

  • The government or any official of the government of a foreign country of concern;
  • A political party or member of a political party or any subdivision of a political party in a foreign country of concern;
  • A partnership, association, corporation, organization, or other combination of persons organized under the laws of, or having its principal place of business in, a foreign country of concern, or a subsidiary of such entity;
  • Any person who is domiciled in a foreign country of concern and is not a citizen or lawful permanent resident of the United States; or,
  • Any person, entity, or collection of persons or entities, described above having a controlling interest in a partnership, association, corporation, organization, trust, or any other legal entity or subsidiary formed for the purpose of owning real property in Florida.
  • NOTE that “foreign principal” does NOT include individuals approved by the federal government to participate in the EB-5 program.

BUYER’S AFFIDAVIT:

  • On November 1, 2023, FREC proposed a rule that would create a new form – the buyer’s affidavit – that buyers will sign at the time of closing.
  • Proposed Rule 61J2-10.200 is HERE.

MAPS:

  • Rule 73C-60.003 (Department of Commerce, final and effective January 4, 2023).
  • Click HERE to access the maps that determine proximity of real property to military installations and/or critical infrastructure.

REGISTRATION OF PROPERTY AND REAL ESTATE CONTRACTS:

  • Click HERE to register property.
  • The PDF version of the Foreign Principal Real Property Registration Form is HERE.
  • Property near military installations and critical infrastructure:
    • Register by January 1, 2024, if property was acquired prior to July 1, 2023.
    • Register within 30 days of acquiring, if property was acquired on or after July 1, 2023.
  • NOTE that real estate contracts where a foreign principal obtains equitable title must also be registered.
  • Rule 73C-60.003 (Department of Commerce, final and effective January 4, 2023).

OTHER IMPORTANT RULES:

  • Rule 73C-60.001 (Department of Commerce, final and effective January 4, 2023).
    • Definitions related to the administration of Fla. Stat. Sec. 692.203.
  • Rule 73-1.001 (Department of Commerce, proposed August 1, 2023, not final).
    • Notice of development of rulemaking regarding property on or around military installations and critical infrastructure.
  • Rule 5J-27.001 (Department of Agriculture and Consumer Services, proposed on December 4, 2023, not final).

AGRICULTURAL LAND:

  • DEFINITION: “Agricultural land” means land classified as agricultural in  Sec. 193.461(bona fide agricultural purposes).
  • RESTRICTIONS ON THE SALE, PURCHASE, AND OWNERSHIP OF AGRICULTURAL LAND BY FOREIGN PRINCIPALS FROM COUNTRIES OF CONCERN:
    • BEFORE JULY 1, 2023:Any foreign principal who owns or acquires property prior to July 1, 2023, must register with DACS no later than January 1, 2024. After January 1, 2024, fines are $1,000 for each day the registration is late.
    • ON OR AFTER JULY 1, 2023:Foreign principals may not directly or indirectly purchase agricultural land, nor acquire any controlling interest in agricultural land after July 1, 2023.
      • EXCEPTION:A foreign principal may acquire agricultural land after July 1, 2023, by devise, descent, enforcement of security interests, or as debt collection, BUT the foreign principal must sell, transfer, or divest within 3 years.
    • AT THE TIME OF PURCHASE:
      • Buyers of agricultural land must sign an affidavit attesting that they are not foreign principals from a foreign country of concern and are following the requirements of the new law.
      • The closing agent is not subject to criminal or civil liability UNLESS the closing agent has actual knowledge of the violation.
    • PENALTIES FOR SELLING, PURCHASING, OR OWNING AGRICULTURAL LAND IN VIOLATION OF THE NEW LAW:
      • Land acquired in violation of this law may be forfeited to the state.
      • A foreign principal that purchases or acquires land in violation of this law commits a second-degree misdemeanor, punishable by up to 60 days in jail, and a $500 fine.
      • A person who knowingly sells agricultural land in violation of this law commits a second-degree misdemeanor, punishable by up to 60 days in jail, and a $500 fine.

MILITARY INSTALLATIONS & CRITICAL INFRASTRUCTURE:

  • DEFINITIONS:
    • Military installation:Base; camp; post; station; yard; or center encompassing at least 10 contiguous acres under the jurisdiction of the Department of Defense or its affiliates.
    • Critical infrastructure: Any of the following, if it employs measures such as fences, barriers, or guard posts that are designed to exclude unauthorized persons – chemical manufacturing facility; a refinery; an electrical power plant as defined in  Sec. 403.031(20); water treatment facility or wastewater treatment plant; a liquid natural gas terminal; a telecommunications central switching office; a gas processing plant, including a plant used in the processing, treatment, or fractionation of natural gas; a seaport as listed in Fla. Stat. Sec. 311.09; a spaceport territory as defined in Fla. Stat. Sec. 331.303(18); and an airport as defined in Fla. Stat. Sec. 333.01.
  • RESTRICTIONS ON THE SALE, PURCHASE, AND OWNERSHIP OF PROPERTY ON OR WITHIN 10 MILES OF MILITARY INSTALLATIONS OR CRITICAL INFRASTRUCTURE:
    • BEFORE JULY 1, 2023:Foreign principals who owned or acquired property on or within 10 miles of military installations or critical infrastructure prior to July 1, 2023, must register with the DEO no later than December 31, 2023. After January 31, 2024, fines are $1,000 for each day the registration is late.
    • ON OR AFTER JULY 1, 2023:Foreign principals from foreign countries of concern are prohibited from acquiring real property on or within 10 miles of any military installation or critical infrastructure.
      • EXCEPTIONS:
        • A foreign principal from a foreign country of concern who is a natural person may purchase 1 residential real property up to 2 acres in size only if: it is not on or within 5 miles of any military installation; the person has a current non-tourist U.S. Visa or has been granted asylum; and, purchase must be made in the name of the person with asylum approval or with the non-tourist U.S. Visa.
        • A foreign principal from a foreign country of concern may acquire real property on or within 10 miles of a military installation or critical infrastructure after July 1, 2023, by devise, descent, enforcement of security interests, or as debt collection, but the foreign principal must sell, transfer, or divest within 3 years.
      • AT THE TIME OF PURCHASE:
        • A buyer of real property on or within 10 miles of a military installation or critical infrastructure must sign an affidavit attesting that they are not a foreign principal, or not a foreign principal prohibited from purchasing the subject real property and are following the requirements of this law.
        • The closing agent is not subject to criminal or civil liability unless the closing agent has actual knowledge of the violation.
      • PENALTIES FOR SELLING, PURCHASING, OR OWNING LAND ON OR WITHIN 10 MILES OF MILITARY INSTALLATIONS OR CRITICAL INFRASTRUCTURE IN VIOLATION OF THE NEW LAW:
        • Land acquired in violation of this law may be forfeited to the state.
        • A foreign principal that purchases or acquires real property in violation of this law commits a second-degree misdemeanor; punishable by up to 60 days in jail, and a $500 fine.
        • A person who knowingly sells in violation of this law commits a second-degree misdemeanor; punishable by up to 60 days in jail, and a $500 fine.

PROHIBITIONS SPECIFIC TO “PERSONS OR ENTITIES ASSOCIATED WITH THE PRC” (CHINA):

  • DEFINITION OF “PERSONS OR ENTITIES ASSOCIATED WITH THE “PRC”:
    • The People’s Republic of China, the Chinese Communist Party, or any official or member of the People’s Republic of China or the Chinese Communist Party;
    • Any other political party or member of a political party or a subdivision of a political party in the People’s Republic of China;
    • A partnership, an association, a corporation, an organization, or any other combination of persons organized under the laws of or having its principal place of business in the People’s Republic of China, or a subsidiary of such entity;
    • Any person who is domiciled in the People’s Republic of China and who is not a citizen or lawful permanent resident of the United States; or,
    • Any person, entity, or collection of persons or entities described above having a controlling interest in a partnership, association, corporation, organization, trust, or any other legal entity or subsidiary formed for the purpose of owning real property in Florida.
  • RESTRICTIONS ON THE PURCHASE, SALE, AND OWNERSHIP OF REAL PROPERTY BY FOREIGN PRINCIPALS, PERSONS, AND ENTITIES OF THE PRC (CHINA): 
    • BEFORE JULY 1, 2023: Anyone who owns or acquires property prior to July 1, 2023, must register with the DEO no later than December 31, 2023. After March 1, 2024, fines are $1,000 for each day the registration is late.
    • ON OR AFTER JULY 1, 2023:“Persons or entities associated with the PRC” CANNOT directly or indirectly own, have a controlling interest in, or acquire by purchase, grant, devise, or descent any interest, except a de minimus indirect interest, in real property in Florida.
  • EXCEPTIONS:
    • A natural person may purchase 1 residential property up to 2 acres only if:
      • Parcel is not on or within 5 miles of any military installation;
      • The person has a current non-tourist U.S. Visa or if they have been granted asylum; and,
      • Purchase must be made in the name of the person with the non-tourist U.S. visa or who has asylum.
    • A person or entity from China may acquire real property after July 1, 2023, by devise, descent, enforcement of security interests, or as debt collection, but they must sell, transfer, or divest within 3 years.
  • AT THE TIME OF PURCHASE:
    • A buyer of real property in Florida must sign an affidavit attesting that they are not “persons or entities associated with the PRC,” or is a person authorized under the exceptions, and are following the requirements of this law.
    • The closing agent is not subject to criminal or civil liability unless the closing agent has actual knowledge of the violation.
  • PENALTIES IF PURCHASE, SALE, AND OWNERSHIP OF REAL PROPERTY IS BY “PERSONS OR ENTITIES ASSOCIATED WITH THE “PRC” IN VIOLATION OF THIS LAW:
    • Land acquired in violation of this law may be forfeited to the state.
    • A foreign principal that purchases or acquires real property in violation of this law commits a third-degree felony; punishable by up to 5 years in jail, and a $5,000 fine (if foreign principal is a habitual felon, then in accordance with the sentencing guidelines in  § 775.084).
    • A person who knowingly sells in violation of this law commits a first-degree misdemeanor; punishable by up to 1 year in jail, and a $1,000 fine.

THIS IS A SUMMARY OF A VERY COMPLICATED LAW – PARTIES TO REAL ESTATE TRANSACTIONS AND REALTORS® SHOULD CONSULT WITH AN ATTORNEY REGARDING HOW THIS NEW LAW MAY IMPACT THEIR LEGAL RIGHTS AND RESPONSIBILITIES. 

DISCLAIMERS:

This resource page is meant to provide education and information on relevant legal topics facing the industry and is not a substitute for legal advice. This website contains links to other third-party websites. Such links are only for the convenience of the reader, user, or browser. MIAMI REALTORS® does not recommend or endorse the contents of third-party sites. For legal advice or representation, contact private counsel or call the Florida REALTORS® Legal Hotline (1-407-438-1409). The information and materials on MIAMI REALTORS®’ website are provided for educational and informational purposes only and should not be construed as legal advice or as an offer to perform legal services on any subject matter. It contains general information and may not reflect current legal developments or information. Nothing is intended to create an attorney-client relationship and shall not be construed as legal advice. The information is not guaranteed to be correct, complete, current, or suitable. MIAMI REALTORS® makes no warranty, expressed or implied, about the accuracy or reliability of the information in this program or materials. Recipients of the information in this program or materials should not act or refrain from acting on the basis of any information without seeking appropriate legal advice on the particular facts and circumstances at issue from an attorney licensed in the recipient’s state. MIAMI REALTORS® expressly disclaims all liability with respect to actions taken or not taken by the recipient based on any or all of the information in this information and materials.

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