New Florida Real Estate Law: Interests of Foreign Countries
A new bill recently signed into Florida law is set to change the state’s real estate landscape—if it survives its legal challenges. The new legislation can affect cross border purchases as well as transactions of non-citizen residents. Florida Senate Bill 264 (SB 264) prohibits people from “countries of concern” from owning or purchasing agricultural land within 10 miles of any military installation or critical infrastructure in the state. The bill defines “countries of concern” as China, Venezuela, Syria, Iran, North Korea, and Cuba. People who are U.S. citizens or lawful permanent residents of any of these countries are not considered foreign principals and are exempt from the bill’s land ownership restrictions.
The law went into effect July 1, and requires buyers to submit an affidavit attesting that they are not a foreign principal. Land acquired before July 1, 2023 is exempt, but foreign property owners must register with the state government or pay a $1,000 per day fine.
Additionally, the law also prohibits officials of the Chinese Communist Party or other Chinese political party, Chinese business organizations, and anyone who lives in China who is not a citizen or lawful permanent resident of the U.S. from purchasing or acquiring any interest in real property in Florida.
Buyers in the above groups who purchased property in the state before the date the law went into effect also must register with the government or be subject to a $1,000 fine. The penalties for noncompliance with the law can be civil and criminal, including forfeiture of the land in question. Knowingly selling land near a military base or critical infrastructure to a foreign principle is a second-degree misdemeanor.
Legal Challenges of Bill 264 for Florida Lawyers and Realtors
The new bill, according to the governor, is an effort to maintain national security and food security, and to stand against what the Governor deems “the United States’ greatest geopolitical threat—the Chines Communist Party.”
But the legislation has already triggered legal challenges. The bill raises concerns about racial profiling and discrimination, and some critics also argue that the law violates the Fair Housing Act, which has specific provisions against the discrimination of home buyers based on race or national origin.
There is also the concern that the law could violate the real estate agent’s code of ethics set forth by the National Association of Realtors, which prohibits its members from turning down real estate clients based on race, color, or national origin. In other words, following this new law violates their code of conduct.
Perhaps most significant is the assertion that the law violates the Equal Protection Clause of the Fourteenth Amendment as well as the Fair Housing Act. The American Civil Liberties Union (ACLU) filed a federal lawsuit in the U.S. District Court for the Northern District of Florida for a preliminary injunction that would put a hold on the law until its constitutionality can be decided by the court. The U.S. Department of Justice filed a Statement of Interest in support of the injunction.
Florida Real Estate Market and Bill 264
The law will likely impact the Florida real estate market in terms of volume of residential home sales closed in Florida in the near future, as well as the sales prices of future home sales. China topped the Miami Association of Realtors’ list of countries whose residents were shopping for Miami homes in April. The fourth most international searches on MiamiRealtors.com in April came from Venezuela, another country included in the restrictions.
Many real estate industry insiders remain divided on the issue. Florida Realtors said that it is too early to comment, while Christina Pappas, president of the Keyes Company, a real estate brokerage firm, said that it is always concerning when a group of potential buyers is eliminated.
For legal counsel on real estate matters, contact Florida Bar Board-Certified Attorneys David E. Klein, Esq. or Guy Rabideau, Esq. at Rabideauklein.com. We have the expertise and experience you need to ensure that your interests are protected during your real estate transactions throughout Florida and cross border. You are welcome to contact us to discuss the legal implications of your next Florida property closing.