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On May 8, 2023, Florida Governor Ron DeSantis signed Senate Bill 264 into law which becomes effective on July 1, 2023 (“the Act”). Subject to narrow exceptions described below, the Act generally prohibits the purchase of certain real property in Florida by “Foreign Principals” of “foreign countries of concern.”

The countries included in the Act’s definition of “foreign country of concern” are the People’s Republic China, the Russian Federation, the Islamic Republic of Iran, the Democratic People’s Republic of Korea, the Republic of Cuba, the Venezuelan regime of Nicolas Maduro, and the Syrian Arab Republic. Therefore, you may be impacted by the Act if you are a “Foreign Principal” as that term is defined in the Act.

Under the Act, a Foreign Principal means, among other things:

i Any foreign entity organized under the laws of, or having its principal place of business, in a foreign country of concern (and any subsidiary of such an entity);

ii Any person who is domiciled in a foreign country of concern and is not a citizen or lawful permanent resident of the United States; or

iii Any person or entity described above having a controlling interest in any entity or trust which is formed for the purpose of owning real property in Florida.

Foreign Principals who currently own (directly or indirectly) certain real property in Florida or who acquire certain real property in Florida before July 1, 2023, must register with the Florida Department of Economic Opportunity (the “Department”) by December 31, 2023. Registrations are considered late after January 31, 2024, at which point a penalty of $1,000 per day that the registration is late may apply. Importantly, the Department may place a lien against the unregistered real property for the unpaid penalty balance.

The Act, which is now the subject of lawsuits seeking to enjoin it, limits Foreign Principals of 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 real property in the State of Florida after July 1, 2023, subject to narrow exceptions and restrictions including the following:

i Grandfathered Property. Foreign Principals who owned or acquired an interest in Florida real property before July 1, 2023, may continue to own or hold real property but may not purchase or otherwise acquire by grant, devise, or descent, any additional real property in Florida. Persons who claim this exception must still register with the Department as described above.

ii Residential Property. Foreign Principals may acquire residential real property in Florida of up to 2 acres in size if the Foreign Principal holds a U.S. visa (or documents confirming asylum in the United States) and the residential real property is not located within 5 miles of a “military installation” as that term is defined in the Act.

iii Devise or Descent. A Foreign Principal may acquire real property in Florida by devise or descent or through enforcement of a security interest provided that such person sells, transfers, or otherwise divests itself of the real property within three (3) years of the acquisition.

Foreign Principals who own or acquire real property in Florida (using one of the exceptions in the Act) after July 1, 2023, must register the real property within thirty (30) days after the property is owned or acquired.

Before entering into or signing any contracts for the purchase of real estate in the State of Florida, we strongly suggest that you contact our office so that we can review how the Act could affect you. If you have further questions or are unsure of how the Act may impact you, please contact the firm immediately. We continue to monitor ongoing events and will provide updates as necessary.