Are you aware of the latest restrictions on real property ownership in Florida? Senate Bill 264, also known as Chapter No. 2023-33, has been in effect since July 1, 2023. It restricts certain individuals and entities associated with countries like China, Russia, Iran, North Korea, Cuba, Venezuela, and Syria from owning specific real estate properties in Florida. However, the implementation of this law and the ongoing legal challenge it faces have created a certain level of uncertainty.
The Florida Department of Commerce (DOC) recently published proposed rules related to the purchase of real property near military installations or critical infrastructure facilities. In addition, the Florida Real Estate Commission (FREC) has also released its proposed rules, which include the form buyer's affidavits required by SB 264. Furthermore, the Florida Department of Agriculture and Consumer Service (DACS) has announced a public workshop to discuss forthcoming rules regarding foreign ownership of agricultural land in Florida.
Although progress has been made in developing rules for SB 264, none of the proposed rules have been officially adopted by the Florida Administrative Code. The DOC has yet to initiate the rulemaking process for real property purchases by individuals associated with China. As a result, short- and long-term compliance with SB 264 is in a state of limbo.
Let's take a closer look at the proposed rules from each department:
DOC's Proposed Rules
The DOC's proposed rules focus on real property purchases near military installations or critical infrastructure facilities. These rules cover various aspects such as definitions, real estate transactions prior to July 1, 2023, registration, computation of time, fines, liens, and a rebuttable presumption related to the FREC affidavits. Although these proposed rules are a step forward for implementation, there are still ambiguities and potential conflicts with the corresponding statute. The DOC invited public comments on the proposed rules until October 11, 2023.
It's worth noting that the DOC has yet to publish rules related to real property purchases by individuals associated with China. There might be a possibility that the DOC is waiting to finalize the proposed rules mentioned earlier before addressing the ones related to China.
FREC's Proposed Rules
FREC has released proposed rules containing the form buyer's affidavits required by SB 264. These rules include two forms: one for natural person buyers and another for entity buyers. Both forms require buyers to confirm that they are not foreign principals as defined in Section 692.201 of the Florida Statutes. However, the form for entity buyers refers to the term "controlling interest" as defined in Section 287.138(1)(a) of the Florida Statutes. The exact interpretation of "controlling interest" within an entity's governing documents remains unclear. The deadline for submitting public comments on the proposed affidavits was November 22, 2023.
DACS's Proposed Rules
The DACS has scheduled a public workshop on November 21, 2023, to discuss proposed rules for foreign ownership of agricultural land in Florida. Although the DACS is a separate agency from the DOC, the enforcement measures under Section 692.202 of the Florida Statutes are similar to those in other parts of SB 264. These measures include registration, liens, fines, etc. The proposed rules from the DACS may bear similarities to the rules proposed by the DOC. However, due to the timing of the workshop, the drafts may not be available until December or January.
Shen v. Simpson: The Legal Challenge
The ongoing legal challenge to SB 264 is currently in the U.S. Court of Appeals for the Eleventh Circuit. The plaintiffs in Shen v. Simpson are Chinese citizens and a Florida real estate brokerage that primarily serves Chinese clients. They are seeking an injunction to prevent the enforcement of SB 264 and a declaratory judgment that the law is unconstitutional.
Judge Allen Winsor of the U.S. District Court denied the plaintiffs' motion for a temporary injunction and found no substantial likelihood of the plaintiffs prevailing on the merits. The plaintiffs have appealed Judge Winsor's order, arguing that the law violates the Equal Protection Clause and the Fair Housing Act. They also assert that it infringes on the federal government's foreign affairs and powers while being unconstitutionally vague. Although the outcome of the injunction is pending, much of SB 264 is expected to remain in place during the litigation.
Conclusion
While SB 264 should have official rules as part of the Florida Administrative Code in the coming months, the ongoing legal challenge in Shen v. Simpson adds uncertainty to the long-term viability of this law. We will keep a close eye on the rulemaking process and provide updates as they become available. Stay informed by following relevant topics and developments on JD Supra.
Remember, understanding these restrictions is crucial to protecting your real property interests in Florida.
