New Rules Regarding the Purchase of Florida Real Property by Certain Persons or Entities from China

On February 6, 2025, Rules 73C-61.001-.007, F.A.C. (“PRC Rules”), go into effect for implementing Section 692.204, Florida Statutes—the law restricting the purchase of real property by certain persons or entities from China (each a “PRC Principal”). The PRC Rules come more than a year after the Florida Department of Commerce (“DOC”) adopted rules for Section 692.203 concerning the purchase of real property near military installations or critical infrastructure facilities by those from Russia, Iran, North Korea, Cuba, Venezuela, or Syria—see Rules 73C-60.001-.007, F.A.C. (“203 Rules”).

The PRC Rules are nearly identical to the 203 Rules, including the same section headings: (1) definitions; (2) real estate transactions prior to July 1, 2023; (3) registration; (4) computation of time; (5) fines; (6) liens; and (7) rebuttable presumption (i.e., regarding the buyer’s affidavit prepared by the Florida Real Estate Commission (“FREC”)—see Rule 61J2-10.200, F.A.C.).

This means that—perhaps most importantly—the same clarifications on “controlling interest in real property” and the expansion of “de minimis indirect interest” will also apply to PRC Principals. In this context, “controlling interest in real property” is essentially any interest in real property other than a lease that gives the PRC Principal: (i) the right to improve or develop the real property; and (ii) the right to attach fixed or immovable structures or objects to the real property. And “de minimis indirect interest” includes:

Any passive ownership interest of a PRC [P]rincipal in an entity, provided that the PRC [P]rincipal does not possess, by virtue of that ownership interest or otherwise, the power to direct or cause the direction of the management or policies of the entity with respect to the interest in real property.

The foregoing also confirms that prior use of the 203 Rules to analyze a potential violation with a PRC Principal was on the right track. However, the same questions following the 203 Rules also apply here. For example, what “retained” powers may undermine the exception (e.g., the right to veto major decisions)? And is a PRC Principal’s interest still passive if it can direct management or policies with respect to everything other than an interest in real property?

The new PRC Rules also contain the grandfathering provision for pending contracts, but the effective date did not change to account for the DOC’s delay in adopting the clarification. In other words, on February 6, 2025, PRC Principals will finally have confirmation that they can own or acquire real property subject to a contract they entered into prior to July 1, 2023—assuming there are still contracts that have been sitting in limbo for over a year and a half waiting to close.

Rule 73C-61.003, F.A.C., implements similar registration provisions to the 203 Rules, but there is no indication whether the DOC will update the “Secure Florida” website to account for both Section 692.203 and Section 692.204 registrations. As of the date of this article, the registration website’s homepage still reads “[u]se the Property Search tool to determine if a property address meets the requirements to register per 692.203, Florida Statutes.” This is somewhat misleading if a PRC Principal needs to register his/her/its property. Either way, PRC Principals that owned or acquired their interest in real property, other than a de minimis indirect interest, prior to July 1, 2023, must register their properties by March 8, 2025 (i.e., 30 days from the effective date of the PRC Rules).

Finally, similar to their counterparts in the 203 Rules, Rules 73C-61.004-.007, F.A.C., clarify the computation of time within the statute; the DOC’s fining authority; the DOC’s lien rights for the nonpayment of fines; and the effect of FREC’s form affidavit on closing agents and sellers. 

A complete copy of the PRC Rules can be found here.