Florida’s real estate market is navigating new complexities following the enactment of Senate Bill 264, a law restricting property ownership by individuals and entities from "foreign countries of concern." The legislation, which aims to safeguard state interests, is currently facing significant legal challenges, creating uncertainty for property owners, buyers, and sellers.
Key Takeaways
- New restrictions on land ownership in Florida by non-U.S. nationals are being challenged in court and are pending resolution.
- Owners, purchasers, and sellers of real estate in Florida should be aware of recent legislation and pending court challenges.
Overview of Florida Senate Bill 264
Enacted in May 2023, Senate Bill 264 (SB 264) prohibits foreign principals from "foreign countries of concern"—including China, Russia, Iran, North Korea, Cuba, Venezuela, and Syria—from owning, controlling, or acquiring certain real properties in Florida. This includes properties within 10 miles of military installations or critical infrastructure. An exception allows "natural persons" from these countries with valid non-tourist visas or asylum status to purchase one residential property under two acres, provided it’s not within five miles of a military installation.
Specific prohibitions target China, barring Chinese Communist Party officials, members, business organizations, and non-citizen/non-permanent resident individuals domiciled in China from acquiring Florida real estate, with a similar exception for residential properties.
Violations carry substantial penalties. Failure to register property acquired before July 1, 2023, by January 31, 2024, can result in daily civil penalties, liens, and forfeiture. Criminal penalties range from misdemeanors for sellers and foreign principals to felonies for Chinese purchasers.
New Regulations Adopted
Three Florida agencies—the Department of Commerce, Department of Agriculture and Consumer Services (FDACS), and the Real Estate Commission (FREC)—have adopted rules to implement SB 264. The Department of Commerce’s rules, effective January 4, 2024, address properties near military installations and critical infrastructure, clarifying definitions and establishing a registration system. Notably, individuals in the EB-5 Program are exempt, and leasehold interests are not considered real property under these rules.
The FDACS adopted rules on April 4, 2024, specifically for agricultural land, detailing registration requirements and enforcement. However, disparities exist between the Commerce and FDACS rules, particularly in the definition of "controlling interest."
The FREC adopted Rule Chapter 61J2-10.200 on January 17, 2024, outlining the required buyer affidavit form.
Ongoing Legal Challenges
The enforcement of SB 264 is currently halted for certain Chinese plaintiffs due to ongoing litigation. The U.S. Court of Appeals for the Eleventh Circuit heard arguments on claims that the law violates the Fourteenth Amendment, the Supremacy Clause, and the Fair Housing Act. The court previously indicated a likelihood that the state statute is preempted by federal law, specifically the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA). A decision is anticipated shortly.