Governor DeSantis signed SB 264 into law on May 8, 2023, which creates part III of Chapter 692, F.S. to been titled “Conveyances to Foreign Entities”

The Act goes into effect on July 1, 2023, and prohibits foreign principals associated with foreign countries of concern from acquiring certain real property in the State of Florida. The Act defines the countries of concern, and includes any agency of, or any other entity of significant control of the following countries:

  • The People’s Republic of China;
  • The Russian Federation;
  • The Islamic Republic of Iran;
  • The Democratic People’s Republic of Korea;
  • The Republic of Cuba;
  • The Venezuelan regime of Nicolás Maduro; and
  • The Syrian Arab Republic

Under the Act, a foreign principal means:

  • The government or any official of the government of a foreign country of concern;
  • A political party or member of a political party or any subdivision of a political party in a foreign country of concern;
  • 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 concernand is not a citizen or lawful permanent resident of the United States;
  • Any person, entity, or collection of persons or entities,described in paragraphs (a) through (d) 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 this state.

With respect to conveyances of real property in this state, the Act generally:

  • Prohibits foreign principals from owning or acquiringagricultural land in the state.
  • Prohibits foreign principals from owning or acquiring any interest in real property within 10 miles of any military installation or critical infrastructure in the state.
  • Prohibits China, Chinese Communist Party or other Chinese political party officials or members, Chinese business organizations, and persons domiciled in China, but who are not citizens or lawful permanent residents of the U.S., from purchasing or acquiring any interest in real property in the state.
  • Provides limited exceptions from the ownership restrictions for the purchase of one residential property, under two acres, so long as i) the property is not on or within 5 miles of any military installation in the state, ii) the person has a non-tourist visa or has been granted asylum in the United States allowing the person to legally be present within the State, and iii) the purchase is in the name of the person who holds the visa or other official documentation allowing the individual to be present in the State.

What does this mean for realtors and closings in Florida?

First, realtors should know who their buyers are and whether they are prohibited from purchasing property under this Act. If the realtor has knowledge of a buyer who is covered by this Act the realtor should not move forward with thetransaction.

Under the Act, purchasers must provide an affidavit at the time of purchase, affirming that the purchaser is not prohibited from buying the property and affirming that the purchaser is in compliance with the Act. The Act tasks the Florida Real Estate Commission (“FREC”) with establishing theform of affidavit required to be signed by the purchaser. Additionally, FREC will adopt rules to implement the Act.

The failure to obtain or maintain the affidavit does notaffect the title or insurability of the title for the real property, however it will be a best practice for all closing agents to obtain and maintain theaffidavit. Closing agents are not subject to civil or criminal liability, unless the agent has actual knowledge that the transaction will result in a violation of the Act.

The Act provides that real property acquired or retained inviolation of this law is subject to forfeiture.