The new Florida real estate law, Florida Senate Bill No. 264, set to take effect on July 1, 2023, aims to restrict foreign ownership in certain circumstances. The law prohibits individuals and entities from China, Russia, Iran, North Korea, Cuba, Venezuela, and Syria from owning or acquiring real property in Florida. This includes agricultural land and properties near military installations or critical infrastructure facilities. Non-compliance with the law can result in legal risks, including civil and criminal penalties, and potential forfeiture of illegally acquired property. Court challenges have been filed, raising questions of discrimination and constitutionality.
Overview of Florida Senate Bill No. 264
Florida Senate Bill No. 264, which creates Part III of Chapter 692, imposes restrictions on certain persons and entities from China, Russia, Iran, North Korea, Cuba, Venezuela, and Syria from owning or acquiring real property in Florida. These restrictions have significant implications for foreign investors and will have an impact on the real estate market in the state. The law aims to protect national security and prevent undue influence by foreign interests in sensitive areas of Florida real estate. It prohibits ownership of Florida real estate by certain individuals and entities from these countries, including agricultural land and land near military installations or critical infrastructure facilities. While there are narrow exceptions to the prohibitions, non-compliance with the new provisions can lead to legal risks for buyers and sellers of Florida real estate. The law also introduces additional documentation requirements for real estate transactions, which should be taken into consideration by all parties involved.
Prohibited Ownership of Florida Real Estate
The law prohibits certain persons and entities from China, Russia, Iran, North Korea, Cuba, Venezuela, and Syria from owning or acquiring property in the state. This restriction on foreign ownership of Florida real estate is aimed at protecting national security and preventing undue influence. The impact on the real estate market will be significant, as it will limit the pool of potential buyers and sellers. The law includes civil and criminal penalties for violations, and the state can seek forfeiture of real property acquired in violation of the law. Buyers and sellers will also need to comply with additional documentation requirements, including completing affidavits under penalty of perjury. Exceptions exist for de minimis indirect interests and certain U.S. visa holders. However, court challenges have been filed against the law, alleging discrimination and unconstitutionality. Overall, the law reflects the government’s concerns about national security and its desire to safeguard sensitive areas of Florida real estate.
Penalties and Requirements for Violations
Buyers and sellers who violate Chapter 692 may face civil and criminal penalties, including potential forfeiture of acquired property. These penalties and requirements have significant implications for the real estate market, particularly for foreign buyers and sellers. Non-compliance with the new provisions can result in legal risks and potential loss of property for violators. The law aims to restrict foreign ownership in sensitive areas of Florida real estate, in order to protect national security and prevent undue influence. Foreign buyers who acquired Florida real estate before July 1, 2023, must register their ownership with the state by a specified deadline, or else face daily civil penalties and potential liens on the unregistered property. Additionally, sellers must exercise due diligence to ensure they are not knowingly selling to violating buyers. These measures underscore the seriousness of the restrictions on foreign ownership and emphasize the need for careful consideration and compliance in real estate transactions.
Additional Documentation and Administrative Rules
Under Chapter 692, buyers and sellers will need to provide additional documentation for real estate transactions in order to comply with the new provisions. These requirements will have a significant impact on the real estate market in Florida. The additional documentation aims to ensure compliance with the law’s restrictions on foreign ownership and prevent potential national security risks. However, these compliance challenges may pose difficulties for both buyers and sellers. Buyers will need to complete at least one affidavit under penalty of perjury, and sellers will need to ensure that they are not knowingly selling to prohibited buyers. The Florida Real Estate Commission will establish the form for these affidavits, and various departments will promulgate administrative rules to implement the new law. It is crucial for buyers and sellers to be aware of these additional requirements to avoid legal risks and ensure smooth real estate transactions.
Exceptions to the Prohibitions
Exceptions to the prohibitions outlined in Chapter 692 of the Florida Statutes include de minimis indirect interests through ownership of registered equities in publicly traded companies and certain natural persons with specified U.S. visas. De minimis indirect interests refer to ownership of a small portion of registered equities in publicly traded companies. This exception allows individuals or entities to have a minimal, indirect stake in Florida real estate without violating the law. Additionally, certain natural persons with specified U.S. visas are permitted to purchase residential real property that meets certain criteria. These individuals must possess the specified U.S. visas, which may include visas for employment, investment, or family sponsorship. It is important for prospective buyers and sellers to understand these exceptions and ensure compliance with the law to avoid any legal risks or penalties.
Court Challenges and Implications for Buyers and Sellers
The recent Florida Senate Bill No. 264, which restricts foreign ownership of real estate in the state, is facing court challenges that allege discrimination and unconstitutionality. A preliminary injunction motion is currently pending in federal court. These legal challenges could have significant implications for buyers and sellers involved in real estate transactions in Florida. If the court grants the preliminary injunction, it would temporarily prevent the enforcement of the new law until a final decision is made. This uncertainty surrounding the law’s validity may cause hesitation among prospective buyers and sellers, as they assess the potential risks and legal implications of entering into contracts or completing transactions. It is essential for those involved in the real estate market to monitor the progress of these court challenges and seek legal advice to ensure compliance with the law and protect their interests.