Florida Restricts Foreign Ownership of Real Property
Florida has enacted legislation, known as Senate Bill 264, effective as of July 1, 2023, which places significant restrictions on foreign individuals and entities acquiring specific types of real estate within the state. This legislation, titled "Conveyances to Foreign Entities," introduces a new chapter into the Florida Statutes, bringing about substantial implications.
Under this law, foreign principals from designated foreign countries face general limitations on owning or acquiring two specific types of real property in Florida: agricultural land and real estate within a 10-mile radius of military installations or critical infrastructure facilities. Notably, for individuals from The People’s Republic of China, this prohibition extends to encompass all lands within Florida.
To provide clarity, the law defines key terms. "Agricultural land" refers to property used for commercial agricultural purposes, while "critical infrastructure facility" includes various facilities with protective measures such as fences and barriers, spanning chemical manufacturing facilities, refineries, power plants, and more. "Foreign country of concern" includes countries such as Cuba, China, Russia, Iran, and others, along with any agencies or entities significantly controlled by these nations. "Foreign principals" are defined as governments or officials from foreign countries of concern, political parties or members thereof, and entities organized under the laws of or primarily based in foreign countries of concern, among others.
While the law introduces substantial restrictions, exceptions are recognized. For those who already own prohibited land as of July 1, 2023, they can continue ownership but must comply with state registration requirements to avoid penalties. Foreign principals can also acquire restricted land through specific means but must divest themselves of the property within three years. Limited exceptions exist for foreign individuals acquiring residential real estate, subject to certain conditions. Additionally, some indirect interests may be exempt from the restrictions. In cases where real property is owned in violation of this law, there's a potential for forfeiture to the state, with implications for third parties, including title companies. To ensure awareness, title companies will include informational notes about the law in commitments, emphasizing that they won't provide insurance for transactions violating the law.
In summary, Florida's new legislation imposes substantial limitations on foreign ownership of specific types of real estate. While exceptions and provisions exist to address various scenarios, this development introduces complexity to real estate transactions, demanding meticulous consideration and compliance by all parties involved.