Understanding Senate Bill 264: How New Restrictions Impact Foreign Buyers in Florida’s Real Estate Market

Many of us in the real estate industry are familiar with longstanding rules and restrictions on purchasing and selling real property, such as the Foreign Investment in Real Property Tax Act (“FIRPTA”), Geographic Targeting Orders, and many others. Another Florida law can be added to the list — Senate Bill 264: Interests of Foreign Countries (“SB 264”). SB 264, which Florida Governor Ron DeSantis signed into law during the most recent legislative session, aims to limit and regulate the sale and purchase of certain Florida real property by “Foreign Principals” from “Foreign Countries of Concern.” Effective July 1, 2023, the FAR/Bar Residential Contract for Sale and Purchase will include the following disclosure in response to SB264:

ATTENTION: SELLER AND BUYER CONVEYANCES TO FOREIGN BUYERS:

Part III of Chapter 692, Sections 692.201-692.205, Florida Statutes, 2023 (the “Act”), in part, limits and regulates the sale, purchase and ownership of certain Florida properties by certain buyers who are associated with a “foreign country of concern, namely: 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, or the Syrian Arab Republic. It is a crime to buy or knowingly sell property in violation of the Act. At time of purchase, Buyer must provide a signed Affidavit which complies with the requirements of the Act. Seller and Buyer are advised to seek legal counsel regarding their respective obligations and liabilities under the Act.

The new law is quite technical and contains many exceptions, but the highlights that all realtors and those in the real estate industry should be aware of include the following:

1. Foreign Country of Concern (“FCC”). SB 264 applies only to the Foreign Principals from China, Russia, Iran, Cuba, Venezuela, and North Korea, including any entity or agency of significant control of such FCC.  
2. Foreign Principal.  For the purposes of the blog, the relevant section of SB 264 defines a Foreign Principal as “any person who is domiciled in a FCC and is not a citizen or lawful permanent resident of the United States.”
3. Types of real estate affected. SB 264 primarily applies to the purchase of three classifications of land purchases:
   1. Purchase of Agricultural Land by Foreign Principals
   1. Purchase of Real Property On or Around Military Installations and Critical Infrastructure
   1. Purchase and Acquisition of Real Property by the People’s Republic of China (“PRC”)
4. Critical Infrastructure. SB 264 describes Critical Infrastructure quite broadly to include any of the following located within 10 miles of the real property: chemical manufacturing facilities, refineries, electrical power plants, water treatment facilities, gas processing plants, seaports, spaceports, and many other facilities supporting Florida’s infrastructure.
5. People’s Republic of China. SB 264 prohibits certain PRC persons from owning (for properties purchased after July 1, 2023) or acquiring ANY real property in the state. This provision applies to “any person who is domiciled in the PRC and who is not a US citizen or lawful permanent resident.” It applies equally to any entity or agency domiciled in the PRC or any official or member of the Chinese Communist Party.

So how does this law affect transactions when Buyers are Foreign Principals from Foreign Countries of Concern? All Buyers should now expect to sign an affidavit at closing stating that they are not a Foreign Principal from an FCC and that SB 264 does not apply to them. Violations of this statute may result in both Buyer and Seller facing various crimes and penalties, which range from felonies and misdemeanors to forfeiture of the property to the State. As of the writing of this Blog, experts are still determining the exact implementation and extent of the new law and its impact on future real estate transactions in Florida. Still, this change is significant, and all parties involved in Florida real estate transactions must be aware of it. It is strongly recommended that all realtors begin using the revised FAR/BAR contract right away.

Due to the complexity and uncertainty surrounding this new law, we would encourage realtors to contact their local trusted real estate attorney with any questions regarding how this law might impact your transactions going forward.