Navigating Florida's SB 264: Restrictions on Real Property Ownership for Certain Foreign Entities
Updates on Florida Law SB 264 Restricting Foreign Ownership of Real Property
Just to remind you that since its enactment in July. 1, 2023, SB 264 law restricts some individuals and entities associated with China, Russia, Iran, North Korea, Cuba, Venezuela, and Syria from owning certain real property in Florida. SB 264 names these individuals and entities as “foreign principals” and the countries as “foreign countries of concern".
On September 20, 2023, proposed rules were released about buying real estate near military bases or important infrastructure sites, which consist of several sections. Important takeaways from the proposed rules include:
1. EB-5 participants were excluded from the definition of “foreign principal”.
2. Pending real estate contracts (entered into prior to July 1, 2023) could proceed to closing if the property was restricted under the new law. Foreign principals, in this situation, must still register the property ownership.
3. Preliminary registration guidelines include:
- a special website for people to check how close a property is to military bases and vital infrastructure in Florida
- a Foreign Principal Real Property Registration Form, which can be downloaded and submitted online within 120 days from the transfer of title.
Important to note that as of November 21, 2023, none of the proposed rules have been officially approved nor enacted to Florida law and the registration system is not currently up and running.
4. More recently a form of Required buyer’s affidavits was provided. There are two form affidavits included in the rules: (1) one for a natural person buyer; and (2) one for an entity buyer. Each form essentially requires the buyer to attest that the buyer is not a foreign principal as defined in the law, or that the buyer is a foreign principal but the transaction is otherwise in compliance with SB 264.
Landmark case challenging SB 264: Shen v. Simpson Four Chinese citizens and a Florida real estate brokerage that works primarily with Chinese clients are challenging the law in court arguing the new law is unconstitutional. On August 17, 2023, Judge Allen Winsor denied the Plaintiff’s motion for temporary injunction. Judge Winsor disagreed that SB 264 violates the U.S. Constitution and the Fair Housing Act. The Plaintiffs appealed Judge Winsor’s order and are continuing to argue that the law violates the Equal Protection Clause and the Fair Housing Act; it intrudes on the federal government’s foreign affairs and powers; and is unconstitutionally vague.
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