• Chapter 2023-33, enacted on May 8, 2023, would limit select persons from the People’s Republic of China (PRC) from owning, having a “controlling interest” in or acquiring additional real property in Florida on and after July 1, 2023. In addition, the act would limit select persons from other “foreign countries of concern” from owning, having a controlling interest in or acquiring additional agricultural land as well as land near military installations and critical infrastructure facilities.
  • “Foreign countries of concern” include the PRC, Russian Federation, Islamic Republic of Iran, Democratic People’s Republic of Korea, Republic of Cuba, Syrian Arab Republic and the Venezuelan regime of Nicolás Maduro.
  • Exceptions apply involving a de minimis indirect interest in real property, security interest in real property and grandfathered property acquired before July 1, 2023.
  • Criminal and civil penalties are attached to violations of the act, but a lawsuit has been filed seeking an injunction against the law’s implementation.

Now the subject of a lawsuit seeking to enjoin it, Florida Senate Bill 264 (CS/CS/SB 264), codified at Chapter No. 2023-33, Laws of Florida, would limit select persons from “foreign countries of concern” from directly or indirectly owning, having a controlling interest in or acquiring by purchase, grant, devise or descent any interest in any additional real property in Florida on or after July 1, 2023. The foreign countries of concern include the People’s Republic of China (PRC), Russian Federation, Islamic Republic of Iran, Democratic People’s Republic of Korea, Republic of Cuba, Syrian Arab Republic and the Venezuelan regime of Nicolás Maduro.

The select persons affected in those countries, referred to as “foreign principals,” include government officials or members of parties from those countries such as the Chinese Communist Party (CCP); entities or a subsidiary organized or having a principal place of business there; persons domiciled there and who are not citizens or lawful permanent residents of the U.S.; and any such person having a controlling interest in an entity or subsidiary formed for the purpose of owning real property in Florida. Similar legislation is pending in additional states; e.g., Texas (SB 147) and Louisiana (HB 537).

Overview of Chapter 2023-33

Under Chapter 2023-33, select persons from the PRC are prohibited from directly or indirectly owning, having a controlling interest in or acquiring by the aforementioned methods any interest in additional real property in Florida after July 1, 2023. Foreign principals from other foreign countries of concern may not do likewise with respect exclusively to additional agricultural land or real property within 10 miles of a “military installation” or certain facilities characterized as “critical infrastructure.” The pertinent “military installations” must be at least 10 contiguous acres. “Critical infrastructure facilities” includes a chemical manufacturing facility, refinery, electrical power plant, water treatment facility, wastewater treatment plant, liquid natural gas (LNG) terminal, telecommunications central switching office, gas processing plant, seaport, spaceport and airport.

Owning and acquiring this type of real property is limited, but so is having a “controlling interest” in any real property in Florida. “Controlling interest” is defined as “possession of the power to direct or cause the direction of the management or policies of a company, whether through ownership of securities, by contract, or otherwise. A person or entity that directly or indirectly has the right to vote 25 percent or more of the voting interests of the company or is entitled to 25 percent or more of its profits is presumed to possess a controlling interest.” “Real property” means “land, buildings, fixtures and all other improvements to land.”

Exceptions to the Law

The act contains exceptions. For example, a person may possess a “de minimis indirect interest” in land. This is an ownership interest that “is the result of the person’s or entity’s ownership of registered equities in a publicly traded company owning the land and if the person’s or entity’s ownership interest in the company is either less than 5 percent of any class of registered equities or less than 5 percent in the aggregate in multiple classes of registered equities; or a noncontrolling interest in an entity controlled by a company that is both registered with the U.S. Securities and Exchange Commission (SEC) as an investment adviser … and is not a foreign entity.”

In addition, a foreign principal may acquire additional real property in Florida after July 1, 2023, by devise or descent, through the enforcement of security interest or through the collection of debts, provided that the person sells, transfers or otherwise divests itself of such real property within three years after acquiring the real property.

Moreover, natural persons who hold a current visa not merely for tourism or official documents confirming asylum in the U.S., where such documentation authorizes the person to be legally present within Florida, may acquire up to 2 acres not on or within 5 miles of any military installation in the name of the person who holds the visa or official documents. These persons may still not acquire agricultural land.

The act also has a grandfather clause for property acquired before July 1, 2023. Foreign principals who owned or acquired an interest (greater than a de minimis interest) in real property before July 1, 2023, may continue to own or hold the real property but may not purchase or otherwise acquire by grant, devise or descent any additional real property in Florida. Persons who exercise this exception and others must register with the Florida Department of Economic Opportunity (FDEO).

Penalties for Violations

Both criminal and civil penalties attach to violations of the act. A person who fails timely to file a registration with FDEO is subject to a civil penalty of $1,000 for each day that the registration is late. FDEO or the Florida Department of Agriculture and Consumer Services (FDACS) may also initiate a civil action in circuit court for the forfeiture of the real property or any interest acquired in violation of the act. A foreign principal that purchases and a person who knowingly sells real property or any interest therein may commit a misdemeanor, but it can be a felony to violate the section prohibiting select persons from the PRC from acquiring additional real property. Closing agents with actual knowledge that a transaction will result in a violation of the act may also be penalized.

Recent Developments

On May 22, 2023, a lawsuit was filed in the U.S. District Court for the Northern District of Florida seeking an injunction against implementation of Chapter 2023-33, claiming that the law violates the Equal Protection Clause, Due Process Clause and Supremacy Clause of the U.S. Constitution and the Fair Housing Act. Meanwhile, the act authorizes the FDEO, FDACS and Florida Real Estate Commission (FREC) to begin rulemaking concerning each of these requirements. The rulemaking process would enable stakeholders to comment and influence the final rules.

If you would like assistance with commenting on rules or if you have questions about interpreting the law, please contact Jacqueline Salcines, Esq.


Contact Our Florida Real Estate Attorney Today

At Jacqueline A. Salcines, PA, our Real Estate lawyer is well versed and experienced to assist foreigners, buyers and sellers with the purchase of real estate in Florida. If you have any questions about the new law, or when the new real estate laws take effect, we are more than ready to help. Get in touch with us by phone at 305-669-5280 or contact us online for your completely private case review. Our law firm provides real estate representation in Coral Gables, Miami-Dade County, Broward, and all across South Florida.