Florida Stops Certain Chinese Buyers and Other Foreign Principals

The new law describes certain types of property that foreign principals may not purchase. The broadest prohibition is on agricultural land. Agricultural land is essentially defined as any land which the local Property Appraiser classifies as agricultural for tax purposes. That is relatively good news as it should be easy to determine if land is agricultural.

The second category of land which cannot be purchased by a foreign principal is property within 10 miles of a military installation or a critical infrastructure facility. A military installation is defined as a base, camp, port, station or yard of at least 10 acres under jurisdiction of the Department of Defense or its affiliates. That seems simple enough, but what about critical infrastructure?

Critical infrastructure is a bit more complicated. Critical infrastructure includes refineries, chemical manufacturing facilities, electric power plants, water or wastewater treatment facilities, telecommunication central switching office, gas processing plants, seaports, spaceports and airports which employ measures to exclude unauthorized persons. Ten miles as the crow files is hard for the average person to measure. Locating all these critical infrastructures might be even harder. Some have postulated the overlapping measurements from all critical infrastructure might come close to enveloping the whole State.

Foreign principals from the People’s Republic of China get their own section under the new law. Those folks are prohibited from purchasing ANY real property in Florida.

Sellers knowingly selling to a foreign principal are subject to criminal prosecution. Violations are misdemeanors except for selling to a foreign principal from China. That is a felony.

Sellers do get some protection under the new law. All buyers of real property in Florida must sign an affidavit at time of purchase warranting they are not a foreign principal and the purchase complies with requirements of the new law.

There are some carve-outs under the new law. Property acquired for a diplomatic purpose recognized, acknowledged or allowed by the federal government is exempt. In addition, a foreign principal who is an individual may purchase one residential property of up to two acres if that person has documentary proof of legal presence in the United States and Florida, is an individual authorized to be in Florida and the United States and the property is not within five miles of a military installation. The purchaser must register with the State within 30 days of purchase or pay a fine of $1,000 per each day registration is late.

Foreign principals can also continue to own property but must register with the State by year-end. Late registration carries that same $1,000 per day penalty. There is a carve-out for property acquired by inheritance or debt collection as long as the property is not within 10 miles of a military installation or critical infrastructure provided the foreign principal divest the property within three years.

A foreign principal violating the new law is not only subject to criminal prosecution; the foreign principal is also subject to mandatory forfeiture proceedings and will forfeit ownership.

The new law is already under challenge in a federal court. The judge in that case recently rejected the plaintiffs’ request to place the law on hold until the legal challenge is decided. To grant the request, the judge would have had to agree the plaintiffs had a reasonably good chance of success in the case. Denial does not mean the converse but may send a message of the judge’s opinion of the likelihood of success challenging the law. In any event, the judge explained there would not be a final resolution anytime soon.