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New Florida Law Prohibits “Foreign Principals” from Purchasing Certain Real Property

A new law in Florida will prohibit foreign principals from purchasing agricultural land or certain real property in the state. The law, Senate Bill 264, was signed into law on May 8, 2023, and becomes effective July 1, 2023. The law creates what is now Part III of Florida Statutes Chapter 692 (to be codified at Fla. Stat. §§ 692.201–.205), and is entitled “Conveyances to Foreign Entities.”

The law defines a “foreign principal” as a person or entity that is controlled by a foreign government or a person who is not a U.S. citizen or permanent resident. The law prohibits foreign principals from directly or indirectly owning, holding, or acquiring “agricultural land” or “critical infrastructure land.”

“Agricultural land” is defined as land that is used primarily for agricultural purposes. “Critical infrastructure land” is defined as land that is located within 1 mile of a military installation or other critical infrastructure facility.

The law does provide some exceptions to these restrictions. For example, foreign principals who are already owners of agricultural land or critical infrastructure land in Florida are allowed to continue to own or hold such land or property. Additionally, the law allows for the sale of agricultural land or critical infrastructure land to a foreign principal if the sale is approved by the Florida Department of Agriculture and Consumer Services.

The new law is intended to protect the national security and economic interests of Florida. It is also intended to prevent foreign principals from gaining control of critical infrastructure or sensitive information.

The new law has, predictably, been met with mixed reactions. Those that support the law argue that it is necessary to protect Florida from foreign influence. Opponents of the law believe that it is discriminatory and that it will harm the Florida economy. The law is currently being challenged in court. A group of individuals and a limited liability company have filed a lawsuit in federal court against representatives of the state of Florida, arguing that the law is unconstitutional. The lawsuit is currently pending in the United States District Court for the Northern District of Florida, case number 4:23-cv-00208-AW-MAF. A copy of the Complaint can be found here.

One of the arguments advanced by the lawsuit is that the law is unconstitutional as it violates the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution. The Fourteenth Amendment reads:

All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

One may think that the United States Constitution should not apply because the new law discriminates against persons based upon their national origin, to the detriment of non-U.S.-citizens. However, the United States Supreme Court has previously held that the protection afforded by the Equal Protection Clause extends not only to U.S. citizens, but also to non-citizens. The landmark case on this was Plyler v. Doe, 457 U.S. 202 (1982). For the law to not violate the Fourteenth Amendment, the state of Florida will have to prove that it serves a compelling state interest.

The law is a significant development in Florida’s relationship with foreign investors. It remains to be seen how the law will affect the state’s economy and its national security. It also remains to be seen whether the law will be upheld by the courts.

Thanks for reading.

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