Sarasota Real Estate News

Hello,

Earlier this morning, I blogged about specific  language in the Florida residential real estate contract. These changes are  effective tomorrow, July 1, 2023 to comply with Florida law.  

From Law Firm of Berlin Patten Ebling, Sarasota, Florida.

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
   2. Purchase of Real Property On or Around Military Installations and Critical Infrastructure
   3. 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.   

Andrew Conaboy, Esq.  

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GUIDANCE FROM FLORIDA REALTORS:

This is very complicated and these laws have not yet been tested. 

Beginning July 1, 2023, ALL buyers must sign an affidavit at closing that will be notarized. The Florida Real Estate Commission is currently preparing the affidavit.

Florida Realtors has a contract addendum that may be used for these transactions. 

There is a concern about Fair Housing and how Realtors handle these parties and transactions. Because this is an unsettled area of the law and number of people weighing in--to include Dept of Justice--Realtors are not to try to assess proximities and rights of ownership because this is the buyer and seller's responsibility. Determining location of military or institutions of concern will not be apparent. Realtors should not go to Mapquest and try to do the calculations. Hopefully there will be a list or resource available to help sellers understand where these facilities are.

Buyers will provide at time of closing an affidavit prepared by Florida Real Estate Commission, so the industry is covering the gap.

Realtors should not provide the affidavit! It may not be the same one the closing agent gives at closing.

Continue to work with ALL buyers equally regardless of where they are domiciled. Realtors do not discriminate, but the transaction is subject to the state law. Parties should speak with their attorneys.

Realtors are not to  ask where the party is from....our purpose is to simply comply with the law. Realtors don’t give legal advice…or calculate proximate distance to military institutions or critical infrastructure. If we get it wrong, a buyer may feel that is a pre-text to not sell to them. 

Florida Realtors educates Realtors about Fair Housing laws, and testing by (undercover) Fair Housing inspectors is a legitimate concept of the Fair Housing world. Realtors: be sure you are prepared to answer the questions properly, and obtain legal advice on how to properly communicate with buyers.

If buyer says they are associated with a country of concern - refer them to their  legal counsel.  Maybe the property of interest is or isn’t in proximity. 

New homes currently under contract: this is unsettled area of the law. We know buyers are very likely to be handed the affidavit when home closes. If they take property in violation of Florida law…then there is a problem. Maybe parties should discuss "assignability of contract."

If they already own property they can’t acquire more. There is a registration requirement that kicks in Jan 1 2024 but it does not exist today. Penalties for non-registration after January 1, 2024, are $1,000 per day. 

Foreign principals who own land within 10 miles of a military installation or critical infrastructure facility have 3 years to transfer the property. Again, there are exceptions, and parties should seek legal counsel. 

Parties who violate these laws can be convicted of a felony and it's a misdemeanor for Realtors.

Florida Realtors has additional resources available, such as the contract addendum and a flow chart that is more easily understood.

So what are the three most important words in real estate today regarding the new Florida laws? Get an attorney!

Linda Holley, Realtor, GRI, SRES, Fine Properties, Sarasota, FL  941-914-4914  

www.LindaHRealtor.com   www.LindaHRealtor.com/blog 

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