As of July 1, 2023, significant changes have been made to the Florida Realtors/Florida Bar (FR/BAR) “AS IS” Residential Contract for Sale and Purchase due to Senate Bill 264. This recently enacted law, effective from July 1, 2023, prohibits specific foreign individuals and companies from owning certain real property in Florida. In this blog post, we will explore the key updates to the Contract and the implications for buyers and sellers.

 

Overview of Senate Bill 264:

Senate Bill 264, signed into law on May 8, 2023, as Part III to Chapter 692 of the Florida Statutes, aims to safeguard national security and economic interests by restricting the sale, purchase, and ownership of certain Florida properties by individuals and companies from “foreign countries of concern.” The countries listed include 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, and the Syrian Arab Republic. Engaging in property transactions that violate this law is a criminal offense.

 

Contract Update and Acknowledgment Requirement:

To ensure compliance with the prohibitions against certain foreign nationals, the Contract has been amended, and a crucial acknowledgment is now included in lines 621-630. Both the seller and buyer must be aware of and acknowledge the provisions of Senate Bill 264 before proceeding with the transaction. This includes the requirement for buyers to provide a signed Affidavit at the time of purchase, which adheres to the Act’s provisions. Seeking legal counsel to understand their obligations and liabilities under the Act is strongly advised for both parties.

 

Impact on Existing Transactions

For those who have executed a previous version of the Contract before or after July 1, 2023, a standardized acknowledgment addendum that mirrors the Contract’s new terminology is available for compliance with the Act’s requirements. However, it is essential to note that Senate Bill 264 has raised concerns about its conformity with existing federal and state equal protection laws, leading to ongoing litigation. To navigate this uncertain terrain, it is recommended that buyers and sellers consult with a Board-Certified Real Estate attorney before proceeding with ongoing or contemplated real estate transactions.

 

Affidavit Challenges and Recommendations

Senate Bill 264 designates the Florida Real Estate Commission (FREC) to draft the affidavit, which sellers and buyers must execute to confirm their compliance with the new prohibitions. However, the legislation’s timing has caused difficulties in producing a satisfactory affidavit. As a result, transactions may face delays and uncertainty, making legal guidance even more crucial for all parties involved.

In light of the significant changes brought about by Senate Bill 264 to the FR/BAR “AS IS” Residential Contract for Sale and Purchase, it is vital for buyers and sellers to be well-informed and seek legal counsel to ensure compliance and mitigate potential risks. At Haber Law, we are closely monitoring the situation and committed to assisting clients in navigating their real estate transactions while adhering to the new prohibitions and requirements. If you have any questions or require legal assistance for drafting or negotiating a real estate contract, do not hesitate to contact our office.