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. The Florida Real Estate Commission (“FREC”), Department of Agriculture and Consumer Services (“DACS”), and Department of Economic Opportunity (“DEO”) 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.

NOTE THAT FREC HAS NOT YET DRAFTED THE AFFIDAVIT BUYERS ARE REQUIRED TO SIGN ON OR AFTER JULY 1, 2023. IT IS UKNOWN WHEN THIS WILL BE RELEASED. ALSO NOTE THAT FLORIDA REALTORS®’ FORMS WILL SOON CHANGE TO ADD DISCLAIMER LANGUAGE.

RESOURCES:

• Florida REALTORS® Legal Hotline: (407) 438-1409
• SB 264 (2023): Interests of Foreign Countries
• Florida REALTORS®, “Senate Bill 264 – Interest of Foreign Buyers” (updated May 23, 2023)
• Flowcharts and Memorandum explaining Senate Bill 264
• “Fla. Sued Over New Law Blocking Chinese Buyers”
• Lawsuit filed in Shen, et. al v. Wilton Simpson in his official capacity as Florida Commissioner of Agriculture, et. al, U.S.D.C. for the Northern District of Florida, Case 4:23-cv-00208-AW-MAF (Complaint filed May 22, 2023; Amended Complaint filed June 5, 2023)
• Florida REALTORS®, “Law Will Impact Some Foreign-Buyer Purchases” (updated June 29, 2023)

LITIGATION UPDATES:

There was a status conference on June 9, 2023, on the SB 264 litigation.  The main topic of discussion was coordinating scheduling. A copy of the transcript is HERE and a summary of the status conference is below:

• Plaintiffs filed this lawsuit on May 22, 2023, the amended complaint on June 5, 2023, and their motions for preliminary injunction and an expedited hearing schedule on June 6, 2023. In part, the plaintiffs want to pause enforcement of the new law.
• Plaintiffs need to serve the state attorney defendants. That will likely impact scheduling.
• The judge will set the deadline for the defendants to respond to the motion for preliminary injunction. He said that the defendants will have at least until June 22, 2023, to respond, but they should not expect that that they will have until July 14, 2023, which is what they wanted.
• Important statements made by the attorney representing the defendants (the state agencies in Florida): he defined “at the time of purchase” as the closing date. The law is not self-executing; meaning, that the 3 different state agencies still need to do the rulemaking on the law. Due to timing, he does not believe the rule making can be completed within the next 2.5 months. Rule making has not started yet.
• The judge told everyone to hold June 28, 2023, as another hearing date – either for a status conference or for oral argument on the motion for preliminary injunction.

On June 14, 2023, the court rendered a scheduling order finding, in part, that the plaintiffs have not demonstrated a need for relief (a stay, or pause on the enforcement of the law) before July 1. Important dates to note – the defendants have until July 3, 2023, to respond to the motion for injunctive relief, plaintiffs have until July 11, 2023, to reply, and the matter is set for hearing on July 18, 2023, at 1:30 PM.

We will continue to post all updates to 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; or
• A political party or member of a political party or any subdivision of a political party in a foreign country of concern; or
• 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; or
• 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.

AGRICULTURAL LAND

• DEFINITION: “Agricultural land” means land classified as agricultural in Stat. 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. NOTE THAT FREC HAS NOT YET DRAFTED THE AFFIDAVIT BUYERS ARE REQUIRED TO SIGN ON OR AFTER JULY 1, 2023. IT IS UKNOWN WHEN THIS WILL BE RELEASED.
    • 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 Stat. 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. NOTE THAT FREC HAS NOT YET DRAFTED THE AFFIDAVIT BUYERS ARE REQUIRED TO SIGN ON OR AFTER JULY 1, 2023. IT IS UKNOWN WHEN THIS WILL BE RELEASED.
      • 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. NOTE THAT FREC HAS NOT YET DRAFTED THE AFFIDAVIT BUYERS ARE REQUIRED TO SIGN ON OR AFTER JULY 1, 2023. IT IS UKNOWN WHEN THIS WILL BE RELEASED.
  • 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 Stat. § 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.

NOTE THAT FREC HAS NOT YET DRAFTED THE AFFIDAVIT BUYERS ARE REQUIRED TO SIGN ON OR AFTER JULY 1, 2023. IT IS UKNOWN WHEN THIS WILL BE RELEASED. ALSO NOTE THAT FLORIDA REALTORS®’ FORMS WILL SOON CHANGE TO ADD DISCLAIMER LANGUAGE.

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.