Law Will Impact Some Foreign-Buyer Purchases
Florida Realtors lawyers spoke to 6K+ members during a June 29 webinar, saying a new law impacting some property sales to certain foreign buyers goes into effect July 1. Some details are not yet clear, but a new disclosure will appear in FR/Bar, CRSP and other contracts on Sat., July 1, and buyers must sign a new affidavit.
ORLANDO, Fla. – Two Florida Realtors® lawyers – Vice President of Law and Policy and General Counsel Juana Watkins, and Deputy General Counsel Marcia Tabak – hosted a webinar on June 29 to give members an overview of upcoming changes when a bill passed by the Florida Legislature and signed by Gov. Ron DeSantis (SB 264) goes into effect on July 1.
To help with compliance, Florida Realtors worked with many entities, including the Leadership Team and the Florida Bar, to update the Florida Realtors/Florida Bar (FR/BAR) contracts, the Contract for Residential Sale and Purchase (CRSP) contract and an addendum, the CFBA-1. In addition, the Vacant Land Contract and Commercial contract have also been updated.
Three sections of the new law impact the state’s real estate industry. Florida Realtors offers more information on its website about the complicated implications of each section and a memorandum and accompanying flowchart.
Major takeaways from the webinar
Don’t offer advice: The penalties for noncompliance can be severe for buyers, sellers and possibly real estate agents. Watkins often repeated the phrase, “Don’t be the source of the information – be the source of the source.” While customers must be told that the law exists and that they must sign an affidavit saying they’re in compliance with the statute, agents should not volunteer information beyond the details now outlined in the contracts and new addendum.
Contract changes: Contract numbers and page counts will change, but the major update in the FR/Bar, CRSP and other contracts occurs directly above the buyers’ and sellers’ signature lines, framed in a box. The same paragraph also appears in the new addendum. That paragraph says:
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.
New affidavit: The law outlines items to be included in an affidavit and charges the Florida Real Estate Commission (FREC) with creating one. However, FREC’s affidavit won’t be ready by July 1. Until FREC creates an affidavit for statewide use, buyers should expect to sign an affidavit provided by their closing agent.
Fair housing concerns: Watkins offered another note of caution: There could be Fair Housing Act implications. She offered a warning to agents who might consider taking steps beyond simply explaining the new wording in the contracts: “Ensure that it’s neither your intent nor motive to discriminate against buyers based upon any protected classes,” she says. “Do not ask buyers questions about their national origin.”
The issue is extremely complicated: Buyers may ask Realtors questions. However, the law is untested in the courts, and only a buyer's lawyer can explain how a specific clause will impact that specific buyer.
The penalties within the law can be harsh, and Watkins strongly urged members not to speculate on the statute’s impact. “Be the source of the source,” she repeated.
Finally, it’s difficult to determine whether a property is included in the new law. According to Tabak, for example, there is not, as of yet, an official list of military installations as referenced by the statute – nor is there a list, map or other way to determine if a property is located near critical infrastructure.
Some issues are still pending: FREC, the Florida Department of Agriculture and Consumer Services and the Florida Department of Economic Opportunity must all implement specific portions of the bill. As a result, many details are still pending.
Questions? Call Florida Realtors Legal Hotline.
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