Florida Sued Over New Law Restricting Foreign Citizens From Buying Land

Washington, D.C. (July 5, 2023) – A group of Chinese citizens and a real estate brokerage firm are suing the State of Florida over the state’s new law that restricts foreign investment in Florida real estate from specific countries, and enacts a near ban on purchases by Chinese, Russian, and other foreign nationals. Senate Bill 264, titled “Interests of Foreign Countries” and effective July 1, 2023, prohibits Chinese nationals and those from certain other countries, including, Russia, from buying land unless they are American citizens or permanent residents. This alert builds upon Lewis Brisbois’ alert of May 19, 2023, which discussed Florida’s new law restricting foreign citizens from buying land in Florida.

The Chinese citizens who are suing over Senate Bill 264 are all allegedly lawfully living in Florida. They are joined by Multi-Choice Realty, LLC, a state real estate brokerage firm that primarily does business with Chinese and Chinese American clients. The lawsuit filed on May 22, 2023 in the U.S. District Court for the Northern District of Florida alleges that Senate Bill 264 is unconstitutional and discriminatory, and that it violates the Fair Housing Act. The American Civil Liberties Union (ACLU), the ACLU of Florida, DeHeng Law Offices PC and the Asian American Legal Defense and Education Fund, in coordination with the Chinese American Legal Defense Alliance, are representing the plaintiffs.

Notably, the plaintiffs contend that the law imposes “especially draconian restrictions” on people from China and that Chinese and Chinese American people “will be forced to cancel purchases of new homes, register their existing properties with the State under threat of severe penalties and face the loss of significant business…” The complaint also alleges that Multi-Choice Realty, LLC could lose significant business.

The plaintiffs have asked the court for a declaratory judgment stating that Senate Bill 264 is invalid. They also ask the court to issue an injunction preventing the law from being enforced against them. Regardless of the outcome at the trial court level, the losing party may, and will likely, appeal the result to the Eleventh Circuit.

Violation of Equal Protection and Due Process Under U.S. Constitution

The plaintiffs who are challenging Senate Bill 264 also argue that the law echoes the exclusionary Alien Land Laws from the 19th and early 20th centuries that have been repealed or struck down. The Alien Land Laws were a series of laws adopted by 15 states prohibiting Chinese, Japanese, and other foreign individuals and entities from purchasing and leasing real estate in U.S., and were ruled unconstitutional by the U.S. Supreme Court in 1952 because they violated the U.S. Constitution’s equal protection guarantees.

The plaintiffs are asking the federal court to strike down Senate Bill 264 for violating equal protection and due process principles under the U.S. Constitution based on the above precedent. In addition, the plaintiffs claim that the law interferes with federal authority over foreign affairs and national security. Furthermore, real estate brokers have called the restrictions discriminatory, with the potential to discourage foreign investment from countries not included in Senate Bill 264.

Future Constitutional Challenges

The State of Kentucky’s House Bill 500, proposed in February 2023 and similar to Senate Bill 264, prohibits the purchase, lease, or acquisition of agricultural land by Chinese, Russian, and other individuals associated with foreign countries that have been deemed by the federal government to be a threat to the United States. In addition to Kentucky and Florida, 15 other states currently have laws restricting foreign private investment in agricultural land. These states include Indiana, Iowa, Kansas, Minnesota, Mississippi, Missouri, Nebraska, North Dakota, Oklahoma, Pennsylvania, South Carolina, South Dakota, Virginia, and Wisconsin.

In light of the recent lawsuit in Florida, such laws deserve closer scrutiny and likely will be challenged soon under the same precedents. It is imperative for foreign owners and investors of residential or commercial land or farmland in any transaction to be continuously apprised of the pending litigation in Florida and to conduct a rigorous compliance check to ensure that there is no violation of these new laws or regulations.

Lewis Brisbois’ attorneys are actively engaged in the wide range of legal issues in this area, and are advising clients on managing legal and business risk as events continue to develop at an accelerated pace. For more information, contact the author or editors of this alert. Visit our Ukraine Conflict Response Practice page for additional alerts in this area.

Author:

Michael Gnesin, Partner

Editors:

Jane C. Luxton, Managing Partner – Washington, D.C.

Andrew Pidgirsky, Partner