Tag: Florida real estate

Two H-1B visa holders and an international student are plaintiffs in a lawsuit alleging Florida’s new law preventing many Chinese citizens from purchasing real estate in the state is unconstitutional. The state will also require U.S. citizens in Florida to attest that the law doesn’t apply to them when buying real estate. Florida Gov. Ron DeSantis has highlighted the new law while pursuing the Republican nomination for president. Analysis shows the law is likely more restrictive than the plaintiffs in the lawsuit argue due to the use of the term “visa” in the bill rather than “status.”

The Florida Law’s Main Provisions

Starting July 1, 2023, Florida law S.B. 264 prohibits a citizen of China from buying real estate in the state unless certain exceptions apply. The exceptions include that it is only “one residential real property that is up to 2 acres” and the “parcel is not on or within 5 miles of any military installation in the state.” The person must have a “current verified United States Visa that is not limited to authorizing tourist-based travel” or have been granted asylum.

The measure applies to “Any person who is domiciled in the People’s Republic of China and who is not a citizen or lawful permanent resident of the United States.” A person who is a citizen of China (and not a U.S. citizen or lawful permanent resident) who meets one of the exceptions and already owns property in Florida “may not purchase . . . any additional real property” in the state.

Other provisions apply to citizens of China, Russia, Iran, North Korea, Cuba, Venezuela and Syria unless they qualify for an exception. These include prohibitions on purchasing agricultural land or real estate near a military installation or critical infrastructure.

The law also places new requirements on American citizens in Florida. “At the time of purchase, a buyer of real property in this state must provide an affidavit signed under penalty of perjury attesting that the buyer is” not prevented from buying the real estate due to the new law. This illustrates how immigration-related restrictions often also affect U.S.-born citizens.

The Lawsuit

A lawsuit filed on May 22, 2023, challenges the Florida law, arguing it “imposes discriminatory prohibitions on the ownership and purchase of real property based on race, ethnicity, alienage, and national origin—and imposes especially draconian restrictions on people from China.”

The complaint discusses the impact of the law on the plaintiffs—four Chinese citizens who live in Florida and a real estate brokerage firm that serves Chinese and Chinese American clients.

“They 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,” according to the complaint. “The law stigmatizes them and their communities, and casts a cloud of suspicion over anyone of Chinese descent who seeks to buy property in Florida. Under this discriminatory new law, people who are not U.S. citizens or permanent residents, and whose ‘domicile’ is in China, will be prohibited from purchasing property in Florida.

“A similar but less restrictive rule will apply to people whose permanent home is in Cuba, Venezuela, or other ‘countries of concern.’ The sole exception to these prohibitions is incredibly narrow: people with non-tourist visas or who have been granted asylum may purchase one residential property under two acres that is not within five miles of any military installation in the state. Notably, there are more than a dozen military installations in Florida, many of them within five miles of city centers like Orlando, Tampa, Jacksonville, Pensacola, Panama City, and Key West. Florida’s new law will also impose requirements on people from China and other ‘foreign countries of concern’ to register properties they currently own, at the risk of civil penalties and civil forfeiture. People who own or acquire property in violation of the law are subject to criminal charges, imprisonment, and fines.”

The attorneys for the plaintiffs are the ACLU Foundation of Florida, the American Civil Liberties Union Foundation, the DeHeng Law Offices and the Asian American Legal Defense and Education Fund. The attorneys filed the complaint in the U.S. District Court for The Northern District of Florida Tallahassee Division.

“The law may be even more restrictive than the lawsuit indicates,” according to Kevin Miner, a partner at Fragomen. “This is because the statute uses incorrect immigration terminology to describe the exception. The statute appears to try to create an exception for individuals who are in the U.S. on a longer-term nonimmigrant status but does so by referencing a ‘visa’ rather than nonimmigrant status. The exception in the finalized bill, as enacted, exempts someone from the law if ‘the person has a current verified United States Visa that is not limited to authorizing tourist-based travel or official documentation confirming that the person has been granted asylum in the United States and such visa or documentation authorizes the person to be legally present within this state.’

“From a U.S. immigration law perspective, a ‘visa’ has a specific meaning. It is a sticker on a page of someone’s passport issued by a U.S. consulate abroad authorizing travel to the United States. It is different than having nonimmigrant status, like holding H-1B status while living in the U.S. and working for a U.S. employer. Because a visa is only needed for travel, many people in the U.S. are lawfully present holding H-1B, L-1 or F-1 student status and don’t have an unexpired visa stamp in their passport. The Florida statute incorrectly references a ‘visa’ rather than ‘nonimmigrant status.’ This could cause further complications for people who may have been intended to be exempted from the law but will be swept up in its restrictions anyway.”

Two H-1B Visa Holders And An International Student As Plaintiffs

The lawsuit includes two plaintiffs who are H-1B visa holders and one international student on an F-1 visa.

“Plaintiff Yifan Shen is neither a citizen nor a permanent resident of the United States but has permission to stay and live in the United States as the holder of a valid H-1B visa, which is a nonimmigrant worker visa,” according to the complaint. “Ms. Shen has lived in the United States for seven years and has lived in Florida for the past four years. She is not a member of the Chinese government or of the Chinese Communist Party. She has a master’s degree in science and is working as a registered dietitian in Florida.

“In April 2023, Ms. Shen signed a contract to buy a single-family home in Orlando to serve as her primary residence. The property, which is a new construction, appears to be located within ten miles of a critical infrastructure facility and within five miles of a military installation. The estimated closing date for Ms. Shen’s new property is in December 2023. Because Ms. Shen’s closing date is after July 1, 2023, Florida’s New Alien Land Law will prevent Ms. Shen from acquiring her new home, specifically, by forcing her to cancel the contract for the purchase and construction of her new property. Ms. Shen stands to lose all or part of her $25,000 deposit if the law goes into effect and she is forced to cancel the real estate contract.”

“Plaintiff Yongxin Liu is neither a citizen nor a permanent resident of the United States but has permission to stay and live in the United States as the holder of a valid H-1B visa, which is a nonimmigrant worker visa,” according to the complaint. “Mr. Liu has lived in the United States for five years and in Florida for four years. He is not a member of the Chinese government or of the Chinese Communist Party. He is an assistant professor at a Florida university in the field of data science. He owns a property close to Daytona Beach, which is his primary residence. As an owner of real property in Florida, Mr. Liu will be required under Florida’s New Alien Land Law to register his property with DEO [Department of Economic Opportunity].

“In addition, because Mr. Liu’s property appears to be located within ten miles of a critical infrastructure facility, Mr. Liu is further subject to the law’s registration requirement. This registration requirement is burdensome, discriminatory, and stigmatizing to Mr. Liu. Mr. Liu also has plans to purchase a second property in the vicinity of Pelican Bay, Florida, for his and his parents’ use as a vacation home. However, Mr. Liu will be prohibited from purchasing a second property under the new law. Furthermore, there is a substantial likelihood that the second property would be within ten miles of a military installation or critical infrastructure facility, resulting in an additional prohibition on the purchase under the new law.

“Due to Florida’s New Alien Land Law, Mr. Liu reasonably fears that real estate agents will refuse to represent him because he is Chinese, that he will be disadvantaged when bidding on property because he is Chinese, and that his search for real estate will be more costly, time-consuming, and burdensome as a result.”

“Plaintiff Xinxi Wang is neither a citizen nor a permanent resident of the United States but has permission to stay and live in the United States as the holder of a valid F-1 visa, which is a nonimmigrant visa for international students. Ms. Wang has lived in the United States and in Florida for the past five years. She is not a member of the Chinese government or of the Chinese Communist Party. She is currently pursuing her Ph.D. degree in earth systems science at a Florida university.

“Ms. Wang owns a home in Miami, which is her primary residence. Ms. Wang is also devoted Christian who worships with a congregation in the Miami area, about ten minutes from her home. As an owner of real property in Florida, Ms. Wang will be required to register her property . . . In addition, because Ms. Wang’s property appears to be located within ten miles of a critical infrastructure facility, Ms. Wang is further subject to the law’s registration requirement. This registration requirement is burdensome, discriminatory, and stigmatizing to Ms. Wang.”

Why The Law May Be Unconstitutional

The complaint asks the court to find the law unconstitutional under the 14th Amendment because it violates plaintiffs’ rights to equal protection and procedural due process. “The law was enacted with the purpose and intent to discriminate against persons based on race, ethnicity, color, alienage, and national origin, in particular, Chinese persons,” according to the complaint. “The law makes impermissible classifications based on race, ethnicity, color, alienage, and national origin that are not justified by a compelling state interest. . . . The law is impermissibly vague, indefinite, and ambiguous because it fails to clearly define ‘critical infrastructure facility,’ ‘military installation,’ and ‘domicile,’ and therefore fails to provide sufficient notice about which properties and persons are subject to its classifications, prohibitions, penalties, and requirements . . . [and] fails to provide sufficient notice as to where the ten-mile and five-mile exclusion zones tied to the covered critical infrastructure facilities and military installations begin and end.”

The complaint also argues the law violates plaintiffs’ rights under the Fair Housing Act. “The law discriminates against persons based on their race, color, and national origin, particularly Chinese persons, with respect to dwellings and residential real estate-related transactions.”

Finally, the plaintiffs ask that the law be declared unconstitutional under the U.S. Constitution’s Supremacy Clause and argue it is preempted by federal law. “The governor and legislators have repeatedly emphasized the need to take action ‘to stand against the United States’ greatest geopolitical threat—the Chinese Communist Party,’” write the plaintiffs. “Accordingly, the law violates the Supremacy Clause because it regulates a field exclusively occupied by the federal government, specifically, the intersection between foreign affairs, national security, and foreign investment, including foreign real estate acquisitions. In so doing, the new landownership prohibitions usurp the power vested by the Constitution and by Congress in the federal government to investigate, review, and take actions with respect to foreign investments, including real estate transactions that raise issues of national security.”

The plaintiffs ask the court for an injunction against the state of Florida from implementing and enforcing the law.

The Impact On U.S. Competitiveness In Attracting Talent

The new law is likely to have an impact on attracting talent to the United States. “China remains a vital source of high-skilled talent for the United States, especially in STEM [science, technology, engineering and math] fields where there is a particularly acute shortage of qualified U.S. workers,” said Fragomen’s Kevin Miner. “By making it more difficult for Chinese nationals to purchase property in Florida, employers who rely on foreign national talent from China and other affected countries may rethink plans to expand their operations into Florida, and this would mean that the jobs for American workers from such an expansion would go away as well.”

Perceptions of Chinese nationals toward the United States as a place to work and study could continue to erode in light of the new law. U.S. consular officers are still denying visas for Chinese graduate students based on the Chinese university they attended, as became apparent in this recent case of a Ph.D. student who cannot return to the United States to complete her doctoral research. Fewer international students from China have chosen to attend U.S. universities in recent years.

“The lawsuit makes an excellent point that regardless of what exceptions the statute may try to create, Chinese nationals will still be disadvantaged as buyers,” said Miner. “Real estate agents may be less willing to work with them, and sellers may be scared by the language of the law and choose not to sell property to a Chinese national. This is detrimental to people doing nothing more than trying to build a career and a life in the United States, and ultimately hurts U.S. competitiveness in the global economy.”