"Alien Land Law" Restricts Foreign Ownership of Real Property in FloridaClient Alert
Overview of the Alien Land Law
On May 8, 2023, Governor Ron DeSantis signed Florida Senate Bill 264 (the “Alien Land Law” or the “Law”), which restricts Chinese citizens, along with foreign nationals from Russia, Iran, North Korea, Cuba, Venezuela, and Syria from purchasing agricultural land or real property within a ten-mile radius of a military installation or a critical infrastructure facility. Such military installations must be at least ten contiguous acres, and such critical infrastructures include a chemical manufacturing facility, refinery, electrical power plant, water treatment facility, wastewater treatment plant, liquid natural gas terminal, telecommunications central switching office, gas processing plant, seaport, spaceport, and airport.
Additionally, Chinese individuals who do not have U.S. citizenship or lawful permanent resident status are restricted from owning any type of real property in Florida. Chinese individuals who have a current U.S. Visa are allowed to own one residential property, provided that they complete a special registration with the appropriate agency.
This Law took effect on July 1, 2023. S.B. 264 added a new Part III titled “Conveyances to Foreign Entities” to the existing Chapter 692 of the Florida Statutes which deals with “Conveyances by or to Particular Entities.” The new Part III includes five new sections (Fla. Stat. Sections 692.201-692.205).
Exceptions to the Law
The Alien Land Law contains certain exceptions. For example:
- Any person or entity is allowed to have a de minimis indirect interest in agricultural lands or real property within ten miles of any military installation or critical infrastructure facility. The de minimis exception only applies to publicly traded companies.
- Any foreign principal may acquire real property by devise or descent, through the enforcement of security interest, or through the collection of debts after July 1, 2023, provided that the foreign principal sells, transfers, or otherwise divests itself of such real property within three years after acquiring the real property.
- Any natural person with a current U.S. Visa not limited to tourist-based travel or that with official documents confirming asylum in the U.S., may acquire, in his/her own name, up to two acres of residential real property not on or within five miles of any military installation. These persons still may not acquire agricultural land, except as authorized under subsection (2). This is the only carve-out available to a Chinese foreign principal.
This Law also has a grandfather clause for properties acquired before July 1, 2023—foreign principals who owned or acquired (greater than de minimis) interest in real property before July 1, 2023 may continue to own that property, but may not acquire by purchase, grant, devise, or descent any additional real property in Florida and must register with relevant departments by a fast-approaching deadline. Agricultural land needs to be registered with the Florida Department of Agriculture and Consumer Service (“FDACS”) by January 1, 2024; and other real property needs to be registered with the Florida Department of Economic Opportunity (“FDEO”) by December 31, 2023.
Penalties for Violation of the Law
Criminal and civil penalties could attach to violations of this Law. A person or entity who fails timely to file a registration is subject to a civil penalty of $1,000 for each day that the registration is late. The real property may also be forfeited to the state if that property or part of that property is owned or acquired in violation of this Law. In addition, a foreign principal that purchases and a person who knowingly sells real property in violation of this Law may commit a misdemeanor, but it can be a felony to violate the section prohibiting select persons from China from acquiring additional real property. Closing agents with actual knowledge that a transaction will result in a violation of this Law may also be penalized.
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 the Alien Land Law, 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 Alien Land Law delegates the responsibility for adopting rules to implement this Law to the FDEO, FDACS and Florida Real Estate Commission (FREC), including rules establishing the form for the affidavit.
Buyers of proscribed property must provide an affidavit attesting compliance.