Deadlines Loom for Some Fla. Foreign Landowners

Update for Real Estate in Florida...Deadlines Loom for Foreign Landowners and Buyers!

The law that applies to some foreign principals who own/acquire certain Fla. properties has registration deadlines. Buyers should speak to counsel about legal obligations.

TALLAHASSEE, Fla. – SB 264 – a bill passed during the 2023 session of the Florida Legislature, signed into law by Gov. Ron DeSantis, and effective on July 1, 2023 – limits and regulates the sale, purchase and ownership of certain properties in Florida by foreign principals, persons and entities described in Part III of Chapter 692, Florida Statutes.

Those foreign principals covered by the new law – associated with China (PRC), Russia, Iran, North Korea, Cuba, Venezuela and Syria – who already owned certain Florida land prior to July 1, 2023, have registration deadlines coming up, and they may face stiff penalties for missing some of those deadlines.

SB 264 also includes a registration requirement for covered foreign principals who acquire certain Florida property after July 1, 2023.

Realtors, however, are not part of the registration process – and, due to the complexity of the new law, should advise their customers with questions to speak to counsel about their legal responsibilities.

Foreign principals covered by the law must register with the Florida Department of Agriculture and Consumer Affairs if the sale, ownership or acquisition involves agricultural land – and only agricultural land.

If NOT agricultural land, foreign principals covered by the law must register with the Department of Commerce for the purchase, sale, ownership and acquisition of real property if:

  • That property is within 10 miles of either a military installation or critical infrastructure (or not within 5 miles of a military installation if the statutory exception applies) OR
  • Where the purchase, sale or acquisition of any nonagricultural property is by a foreign principal associated with the PRC, as defined by the law.

Ownership of agricultural land

A foreign principal that “directly or indirectly owns or acquires agricultural land or any interest in such land in this state” before July 1, 2023, must register with the Department of Agriculture and Consumer Services by Jan. 1, 2024, except if their interest is divested by January 1, 2024.”

If a foreign principal registers after Jan. 31, 2024, they face fines – a civil penalty of $1,000 for each day that the registration is late and the department can place a lien against the unregistered  agricultural land for the unpaid balance of any penalties and ultimately may file a civil action for forfeiture. 

Of Note: This final rule from the Florida Department of Agriculture is still pending. However, should the current proposed rule become effective, it “will require registration for foreign principals who acquire a direct or indirect ownership interest after July 1, 2023, (through devise, or descent or because of a security interest or collection of debt) within 30 days from the effective date of the rule and, following the effective date of the rule, within 30 days after the property is acquired

Proximity to a military installation or critical infrastructure

The Florida Department of Commerce (formerly the Department of Economic Opportunity) oversees all other registration by foreign principals per SB 264.

A foreign principal that “directly or indirectly owned or acquired land or any interest in such land within 10 miles of a military installation or critical infrastructure in this state” before July 1, 2023, must register with the Department of Commerce by Dec. 31, 2023. If a foreign principal registers after Jan. 31, 2024, they face fines – a civil penalty of $1,000 for each day that the registration is late.

The statute also requires registration within 30 days of acquisition if the foreign principal acquires (by devise, descent, debt collection or by purchase that complies with the statutory exception) such property after July 1, 2023.

However, the pending Department of Commerce rules for registration state that registration for properties acquired by foreign principals shall be within 30 days from the effective date of the rule and, following the effective date of the rule, within 30 days after the property is acquired.

There is another noteworthy registration requirement that applies to foreign principals with equitable title to certain properties: The rule, should it go into effect, will also require registration with the Department of Commerce within 120 days of contract execution if a natural person is A) a foreign principal under the law (either has a current U.S. visa not limited to tourist-based travel or been granted asylum in the U.S.), B) enters into a contract to purchase one residential property, less than 2 acres (i.e. pursuant to the statutory exception, not within 5 miles of a military installation) and C) has no obligation to close within 90 days.

A civil penalty of $1,000 per day would also apply to failing to register equitable title under the proposed regulation.

Rules specific to citizens of the People’s Republic of China

In addition, the registration requirements apply to certain individuals and entities associated with the PRC. If these foreign principals associated with the PRC owned Florida agricultural property prior to July 1, 2023, registration is required with the Department of Agriculture and Consumer Affairs by Jan. 1, 2024, as described above.

If these foreign principals associated with the PRC owned Florida nonagricultural property prior to July 1, 2023, registration is required with the Department of Commerce by Dec. 31, 2023, as described above.

The registration of either one is considered late after Jan. 31, 2024. 

In addition, if a foreign principal associated with the PRC acquires Florida property either by devise, descent, enforcement of security interest, through collection of debt or if a natural person acquires a direct or indirect ownership interest per the statutory exception after July 1, 2023, the statute specifies that registration is required within 30 days of an acquisition.

Article provide by : Kerry Smith https://www.floridarealtors.org/news-media/news-articles/2023/12/deadlines-loom-some-fla-foreign-landowners

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