Under Florida’s foreign buyer ban, certain nationalities are not allowed to buy property. Reactions were mixed and questions were raised. Read on for more
A new law in Florida that restricts certain foreigners from buying property is already in full effect. However, the state’s ban on foreign buyers is facing scrutiny not only from legal experts but also from affected citizens. It is also causing some issues within the mortgage industry as prohibitions are implemented.
In this article, Mortgage Professional America will cover pressing matters surrounding Florida’s foreign buyer ban. We will also discuss how it has affected mortgage brokers and lenders alike. If you have clients who might be interested or even affected by this ban, share this with them!
Overview of Florida’s foreign buyer ban
Signed in May 2023 by the state’s Republican Governor Ron DeSantis, Florida Senate Bill 264 (SB 264) provides a list of foreign countries banned from property ownership. After the law was implemented, property buyers in Florida are now required to provide an affidavit attesting that the purchaser is not a foreign principal.
The law largely restricts foreign ownership of land meant for agriculture and parcels near military installations. It also bans foreign ownership of property located within 10 miles of critical infrastructure facilities in the state.
Watch this short video to learn more about Florida’s new law:
Foreign countries listed in the ownership ban
There are seven countries targeted by the foreign buyer ban in Florida:
- China
- Russia
- Cuba
- Iran
- North Korea
- Syria
- Venezuela
SB 264 lists these countries and referred to them as “foreign countries of concern.” As such, affected parties are seeking legal action to counter this law. Protesters have also been actively voicing their dissent toward the restrictions on foreign ownership.
Zeroing in on China
Focusing largely on China in signing the bill into law, DeSantis said he implemented the measure largely “...to counteract the malign influence of the Chinese Communist Party” in his state. He advanced the law as an effort “...to protect digital data from Chinese spies, and to root out Chinese influence in Florida’s education system.”
DeSantis added that the bill would prevent corporate espionage from China and “...to stop the CCP [Communist Chinese Party] influence in our education system from grade school to grad school.”
“We are following through on our commitment to crack down on Communist China,” he said.
In addition, SB 264 provides more prohibitions to Chinese companies and individuals who have permanent addresses in China than other foreign nationals. They will also face heavier penalties if charged with violation of this law. The same is true for those who are not considered as lawful permanent residents in the US.
What do Chinese buyers look for when buying property? Homes in rich communities close to top schools, among other things.
Not all Chinese people are members of the Chinese Communist Party
In opposing the bill before being enacted into law, the Florida Asian American Justice Alliance (FAAJA) focused on a sentiment voiced by DeSantis at a press conference leading up to his signing. “If you look at the Chinese Communist Party, they’ve been very active throughout the Western Hemisphere in gobbling up land,” DeSantis was quoted as saying.
In essence, the law “equates all Chinese citizens to agents of the CCP,” according to FAAJA officials.
Toshia Drummond, a mortgage broker from Approved Mortgage Solutions in Plantation, agreed with what FAAJA pointed out. She also suggested that the law’s implementation was a slippery slope.
“This is a cause for concern for other minority groups, as this may set a dangerous precedent for future legislation that targets specific racial or ethnic groups,” Drummond said.
“Such policies could lead to unconstitutional discrimination that negatively affects the rights of all minority groups in America,” she added.
Exemptions to SB 264
Florida’s law banning foreign ownership of properties might be restrictive but there are still some exemptions. Let us highlight some of them:
- not all foreign buyers are banned from purchasing properties in Florida, only those from the seven countries listed above
- citizens from any of the foreign countries of concern can still own property if it will be acquired for diplomatic purposes
- foreign principals can buy properties if they are not agricultural land or within 10 miles in proximity with military installations or critical infrastructure facilities
Did SB 264 amend any law?
Yes. The restrictive law in Florida has amended several laws including:
- The Florida Electronic Health Records Act
- The Health Care Licensing Procedures Act
- A Florida statute criminalizing threats and extortion
How did the ban on foreign buyers affect mortgage brokers in Florida?
Mortgage brokers in Florida are greatly affected by the ban in terms of dealing with clients and their business. With the law being enforced, brokers will have to consider the prohibitions and be extra cautious when buying or selling properties in the state. They would also need to advise their clients to engage the services of competent lawyers to avoid any legal repercussions.
Brokers would need to make additional verifications for buyers who might be included in the ban. This can make mortgage applications even more complicated since banks and lenders will mostly require more conditions for property buyers.
What about real estate agents?
As for real estate agents in Florida, their business is also affected since they have no choice but to comply with the law. They would have to be selective of their clients to avoid fruitless transactions. Challenges might also arise in helping clients look for properties that are not included in the ban. This is so because this Floridian law did not provide an official map of the critical infrastructure mentioned in SB 264.
Mortgage brokers in Florida respond to the foreign buyer ban
Already beset by volatile interest rates, affordability crises, and inflation, brokers must now take precautions to avoid such sales—an added burden yielding mixed sentiment. As a result, reactions to the new law were decidedly mixed.
Florida broker Laura Ray (pictured above left), of Liberty Mortgage Lending Group Inc. in Fort Myers took a diplomatic approach as a response. She did this while avoiding potential political motivations from a law signed by a governor who had presidential aspirations but has recently withdrawn. Ray said that the law is here, and brokers should focus on the best ways to navigate around it.
“I have more questions regarding the bill to decide if I am in support or not,” Ray told Mortgage Professional America. “The reality is that the bill is passed. The more substantive question is how professionals, such as me, in the finance and real estate industries will navigate the landscape of this bill,” she said.
But Ray said that the law was at odds with her industry’s code of ethics. “We are bound by association, state, and federal laws that prohibit how our actions affect protected classes.
“As new as this is, we have yet to see how our industries are going to respond to this in terms of the ethical and legal manner in which we handle clients and potential clients involved, and whether or not it actually does affect protected classes.
"Even though it looks as though it could be challenged formally at some point, it is currently passed. This means that everyone involved in this industry will have to double down to understand the interaction of the bill within the industry.”
Drummond (pictured above right) was a bit more strident in her response. She said that the Florida law “…appears to unfairly single out individuals of Chinese and other nationalities, which goes against the equal protection clause of the 14th Amendment.
“Discriminating against people based on their national origin is considered a form of discrimination and is a protected class under civil rights law,” Drummond said.
Law officials and citizens also respond
Legal experts seem to be divided on that stance, with some worrying about the Florida law’s potential in setting a discriminatory precedent. As for civilians’ response, a group of Chinese citizens represented by the American Civil Liberties Union (ACLU) filed a motion with the court, saying that SB 264 is unconstitutional. They also said that it goes against the rules which guarantee equal protection and due process.
Here is a video about protesters and the lawsuit filed against this Floridian law:
Making a difference and focusing on client service are part of a mortgage broker’s purpose – find out more in the linked article.
How mortgage professionals can work around SB 264
As discussions and protests continue to flood the implementation of Florida’s foreign buyer ban, mortgage professionals must be able to ride the tide. A lot of doors might have been closed since there are many foreign nationals who can be eligible property buyers in Florida. And this can mean a downward slide in mortgage leads for brokers and less applications for lenders.
But those who thrive in the mortgage market are resilient and flexible. They can withstand difficulties and they find opportunities amid challenges. That kind of mindset can propel mortgage professionals to the top, just like those listed as the best in the industry.
Learn more about the top mortgage brokers and lenders not just in Florida but nationwide on our Best in Mortgage page and be inspired by their stories.
What are your thoughts on Florida’s foreign buyer ban? Do you have other tips for mortgage professionals on how to work around this new law? Share them in the comments section below.
