The State of Florida recently enacted Florida Statute 692.203, a law designed to restrict certain Foreign Principals from owning land near a military instillation or critical infrastructure facility in the State. It is essential that Florida homeowners and prospective purchasers understand exactly what the new law is restricting.
Who Does the Law Apply to?
This law applies to “Foreign Principals.” Under Florida Statute §692.201(4), there are five groups included in the definition of Foreign Principal. First, any government or government official from a foreign country of concern. Second, any political party, political party member, or political party subdivision from a foreign country of concern. Third, a business entity organized under the laws or having its principal place of business in a country of concern. Fourth, A person domiciled in a foreign country of concern who is not a United States citizen. Finally, any person or entity described in the four parts above that has a controlling interest in a business entity formed for the purpose of owning real property in the State of Florida.
Based on the definition of “Foreign Principal,” this law only applies to those affiliated with a “country of concern.” The statute lists the countries that the State of Florida considers countries of concern. These countries are the People’s Republic of China, the Russian Federation, the Islamic Republic of Iran, the Democratic People’s Republic of Korea, the Republic of Cuba, the Venezuelan regime of Nicolás Maduro, and the Syrian Arab Republic.
What Does Florida Statute §692.203 Say?
The statute begins by stating that a Foreign Principal may not directly or indirectly own, have a controlling interest in, or acquire by purchase, grant, devise, or descent, any interest in real property on or within 10 miles of any military installation or critical infrastructure facility in Florida. A military installation is defined as a base, camp, post, station, yard, or center encompassing at least 10 contiguous acres that is under the jurisdiction of the Department of Defense or its affiliates. The term “critical infrastructure facility” covers several places, including airports, seaports, gas processing plants, refineries, and water treatment facilities.
There are some exceptions to the general rule promulgated by 692.203. For example, de minimus indirect interests in the real property are not subject to penalty under this law. Another exception to the general rule is if the Foreign Principal had the interest or owned the real property before July 1, 2023. If this is the case, that Foreign Principal can continue to own or hold an interest in the real property. However, the Foreign Principal cannot purchase or acquire any additional property within the 10-mile limit addressed above. This property will have to be registered with the Department of Economic Opportunity by December 31, 2023. If the property is not registered by January 31, 2024, the registration will be considered late, and there will be a civil penalty of a $1,000 fine for each day that the registration is late.
Furthermore, a Foreign Principal that is a natural person may purchase residential real property up to two acres in size if three conditions are met. First, the parcel cannot be within five miles of any military installation. Second, the person must have a current verified United States Visa that is not limited to tourist-based travel. This condition can also be met by official documentation confirming that the person has been granted asylum in the United States and are authorized to be legally present in the State of Florida. Lastly, the purchase of the property must be in the name of the visa or documentation holder. Foreign Principals that acquire real property in this manner must register with the Department of Economic Opportunity within 30 days.
The final exception to the general rule is applied when the Foreign Principal acquires the real property or an interest in it after July 1, 2023, by devise or descent, through the enforcement of security interests, or through the collection of debts. When this occurs, the Foreign Principal will not be subject to penalty so long as they get rid of their ownership interest in the real property within three years of acquiring it.
Lastly, all buyers of real property that is within 10 miles of a military installation or critical infrastructure facility must submit an affidavit stating that they are not a Foreign Principal prohibited form obtaining the property, and that they are in compliance with the requirements of this law. A failure to obtain the affidavit does not affect the title or subject the closing agent to civil or criminal liability unless there was knowledge of the violation.
What is the Law’s Effective Date?
The law went into effect on July 1, 2023. This date also serves as a cutoff point for what rules apply to certain homeowners. For example, purchasing a house subject to this law on June 30 would allow the homeowner to retain ownership. However, purchasing a house today would result in a possible violation of this law.
What are the Penalties for a Violation of this Law?
The statute provides for penalties for two individuals. First, a foreign principal that purchases or acquires real property in violation of the law commits a second-degree misdemeanor. A second-degree misdemeanor is punishable by either a prison sentence of up to 60 days, or a fine up to $500. Furthermore, a person who knowingly sells real property in violation of this law also commits a second-degree misdemeanor, subjecting the seller to the same penalties as the buyer.