With Florida’s enactment of Florida Statutes § 692.204, titled Purchase or Acquisition of Real Property by the People’s Republic of China Prohibited, certain Chinese nationals are now prohibited from purchasing or owning real property in Florida. Specifically, this law applies to citizens of China who are not United States citizens or lawful permanent residents.
This prohibition has already been challenged in court and upheld as constitutional, valid, and enforceable. If you are impacted by this law and are currently under contract to purchase real estate in Florida, you may have legal grounds to terminate your purchase agreement. It is essential to consult with an attorney of your choosing to understand your rights and available options. Most real estate contracts contain provisions related to force majeure, frustration of purpose, illegality, or impossibility of performance. The enactment of Florida Statutes § 692.204 may trigger one or more of these clauses. However, terminating a contract and recovering your deposit or earnest money is not automatic. To avoid forfeiting your funds, your purchase agreement must be carefully reviewed by a licensed Florida attorney experienced in this area of law. An attorney can also issue a formal demand letter or rescission notice to the seller and any escrow agent holding your deposit.
Time is critical. Sellers often attempt to declare buyers in breach of contract on technical grounds and then seek release of the full deposit as liquidated damages. As the purchaser, you bear the burden of timely raising legal defenses, such as the statutory prohibition under § 692.204 or other purchaser protections, that may allow you to legally terminate the contract and recover your deposit. In reality, most purchase agreements are drafted by the seller’s attorneys and heavily favor the seller. Unsuspecting buyers can easily be found in breach for minor or technical reasons, which may result in the loss of their entire deposit and, in some cases, additional liability for the seller’s attorney’s fees and costs.
At Urban Thier & Federer, P.A., we do not represent sellers or developers. We represent purchasers only and have helped hundreds of buyers successfully terminate real estate contracts and recover their deposit funds. We are so confident in our ability to help that many of our cases are handled on a No Win, No Fee basis; meaning you pay nothing unless and until we recover money for you.
If you believe you may be affected by Florida Statutes § 692.204, we strongly encourage you to act immediately and consult with us or another attorney of your choice. You should avoid working with any attorney or law firm connected to or recommended by the seller.
Florida Statutes § 692.204 Ban
692.204 Purchase or acquisition of real property by the People’s Republic of China prohibited.—
(1)(a) The following persons or entities may not directly or indirectly own, have a controlling interest in, or acquire by purchase, grant, devise, or descent any interest, except a de minimus indirect interest, in real property in this state:
1. The People’s Republic of China, the Chinese Communist Party, or any official or member of the People’s Republic of China or the Chinese Communist Party.
2. Any other political party or member of a political party or a subdivision of a political party in the People’s Republic of China.
3. A partnership, an association, a corporation, an organization, or any other combination of persons organized under the laws of or having its principal place of business in the People’s Republic of China, or a subsidiary of such entity.
4. Any person who is domiciled in the People’s Republic of China and who is not a citizen or lawful permanent resident of the United States.
5. Any person, entity, or collection of persons or entities described in subparagraphs 1. through 4. having a controlling interest in a partnership, association, corporation, organization, trust, or any other legal entity or subsidiary formed for the purpose of owning real property in this state.
(b) A person or entity has a de minimus indirect interest if any ownership is the result of the person’s or entity’s ownership of registered equities in a publicly traded company owning the land and if the person’s or entity’s ownership interest in the company is either:
1. Less than 5 percent of any class of registered equities or less than 5 percent in the aggregate in multiple classes of registered equities; or
2. A noncontrolling interest in an entity controlled by a company that is both registered with the United States Securities and Exchange Commission as an investment adviser under the Investment Advisers Act of 1940, as amended, and is not a foreign entity.
(2) Notwithstanding subsection (1), a natural person described in paragraph (1)(a) may purchase one residential real property that is up to 2 acres in size if all of the following apply:
(a) The parcel is not on or within 5 miles of any military installation in this state.
(b) The person has a current verified United States Visa that is not limited to authorizing tourist-based travel or official documentation confirming that the person has been granted asylum in the United States and such visa or documentation authorizes the person to be legally present within this state.
(c) The purchase is in the name of the person who holds the visa or official documentation described in paragraph (b).
(3) A person or entity described in paragraph (1)(a) that directly or indirectly owns or acquires any interest in real property in this state before July 1, 2023, may continue to own or hold such real property, but may not purchase or otherwise acquire by grant, devise, or descent any additional real property in this state.
(4)(a) A person or entity described in paragraph (1)(a), subsection (2), or subsection (5) must register with the Department of Commerce if the person or entity owns or acquires more than a de minimus indirect interest in real property in this state. The department must establish a form for such registration which, at a minimum, must include all of the following:
1. The name of the owner of the real property.
2. The address of the real property, the property appraiser’s parcel identification number, and the property’s legal description.
(b) A person or entity that fails to timely file a registration with the department is subject to a civil penalty of $1,000 for each day that the registration is late. The person or entity subject to the registration requirements must register the property or property interests owned or acquired before July 1, 2023, by December 31, 2023. The registration is considered to be late 30 days after January 31, 2024. A person or entity that owns or acquires real property or an interest in real property as authorized under subsection (2) or subsection (5), other than a de minimus indirect interest, on or after July 1, 2023, must register the real property or interest within 30 days after the property or interest is owned or acquired. The department may place a lien against the unregistered real property for the unpaid balance of any penalties assessed under this paragraph.
(5) Notwithstanding subsection (1), a person or an entity described in paragraph (1)(a) may acquire real property in this state on or after July 1, 2023, by devise or descent, through the enforcement of security interests, or through the collection of debts, provided that the person or entity sells, transfers, or otherwise divests itself of such real property within 3 years after acquiring the real property, unless the person or entity is exempt under s. 692.205.
(6)(a) At the time of purchase, a buyer of real property in this state must provide an affidavit signed under penalty of perjury attesting that the buyer is:
1. Not a person or entity described in paragraph (1)(a) or that the buyer is a person described in paragraph (1)(a) but is authorized under subsection (2) to purchase the subject property; and
2. In compliance with the requirements of this section.
(b) The failure to obtain or maintain the affidavit does not:
1. Affect the title or insurability of the title for the real property; or
2. Subject the closing agent to civil or criminal liability, unless the closing agent has actual knowledge that the transaction will result in a violation of this section.
(c) The Florida Real Estate Commission shall adopt rules to implement this subsection, including rules establishing the form for the affidavit required under this subsection.
(7)(a) If any real property is owned or acquired in violation of this section, the real property may be forfeited to the state.
(b) The Department of Commerce may initiate a civil action in the circuit court of the county in which the property lies for the forfeiture of the real property or any interest therein.
(c) Upon filing such action, the clerk must record a lis pendens in accordance with s. 48.23. The court must advance the cause on the calendar. The defendant may at any time petition to modify or discharge the lis pendens based upon a finding that there is no probable cause to believe that the real property, or any portion thereof, is owned or held in violation of this section.
(d) If the court finds that the real property, or any portion thereof, is owned or held in violation of this section, the court must enter a final judgment of forfeiture vesting title to the real property in this state, subject only to the rights and interests of bona fide lienholders, and such final judgment relates back to the date of the lis pendens.
(e) The department may sell the real property subject to a final judgment of forfeiture. Any proceeds from the sale must first be paid to any lienholders of the land, followed by payment of any outstanding fines assessed pursuant to this section, after which the department must be reimbursed for all costs related to the forfeiture civil action and any costs related to the sale of the land. Any remaining proceeds must be paid to the property owner.
(f) At any time during the forfeiture proceeding, the department may seek an ex parte order of seizure of the real property upon a showing that the defendant’s control of the real property constitutes a clear and present danger to the state.
(8) A violation of this section constitutes a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
(9) A person who knowingly sells real property or any interest therein in violation of this section commits a misdemeanor of the first degree, punishable as provided in s. 775.082 or s. 775.083.
(10) The Department of Commerce shall adopt rules to implement this section.
Consult With An Experienced Real Estate Lawyer In Florida
Florida real estate has long been an attractive investment for international buyers. However, recent changes in Florida law have created serious and unexpected legal consequences for certain foreign purchasers. If you are a Chinese national who is not a U.S. citizen or permanent resident and are now prohibited from completing a real estate purchase under Florida Statutes § 692.204, it is critical to understand that you may still have legal options. Urban Thier & Federer, P.A., has the experience and resources to help affected purchasers terminate contracts and recover their deposit or earnest money.
Call us at 212-256-9513 or complete our online contact form to speak with an experienced Florida real estate attorney. We are ready to help you understand your rights and protect your financial interests.