In episode 29 of The Real Talk, Raquel Ramirez is joined by real estate attorney, Barry Simons, to discuss the changes in the law regarding foreign ownership and registration requirements for property purchases, as well as the impact of migration on the real estate market.
Tune in to gain insights and expert advice on navigating the complexities real estate.
TIMESTAMPS
[00:01:34] Real Estate-Related Transactions and Litigation.
[00:05:10] County's Investigation into Homestead Exemptions.
[00:08:19] Changes in Real Estate Law.
[00:12:41] Foreign Ownership of Agricultural Land.
[00:17:05] Foreign Principles and Real Estate.
[00:21:01] Penalties for Not Registering.
[00:26:06] Foreign Buyers and Legal Implications.
[00:31:32] BSA Department and Money Laundering.
[00:32:37] Global Relocation and its Impact.
[00:36:56] Property Divestment and Inheritance.
[00:42:38] Real Estate Exceptions and Limitations.
[00:50:03] Everything Ties in Together.
In this episode, Raquel Ramirez and Atty Barry Simons discuss the challenges of understanding the intricacies of the law and the potential penalties associated with non-compliance. They note the absence of a clear map or comprehensive listing of all legal requirements and penalties, making it difficult for individuals to navigate the legal landscape independently. They also emphasize the significance of the penalties individuals may face if they fail to comply with the law.
Overall, Raquel and Atty Barry emphasize the complexity of the law and the potential consequences of non-compliance. It encourages individuals to conduct thorough research and seek professional advice to effectively navigate the legal landscape.
QUOTES
SOCIAL MEDIA LINKS
Raquel Ramirez
Instagram: https://www.instagram.com/featured_properties_intl/
Facebook: https://www.facebook.com/featuredre
LinkedIn: https://www.linkedin.com/in/raquel-ramirez/
Atty Barry Simons
Facebook: https://www.facebook.com/BarrySimonsLaw/
LinkedIn: https://www.linkedin.com/in/barrylsimons/
WEBSITES:
The Real Talk: https://www.therealtalkpodcast.net/
Featured Properties International: https://msha.ke/featuredre
The Law Offices of Barry L. Simons: https://www.barrysimons.com/
SPEAKER00: Welcome to The Real Talk. I'm Raquel Ramirez, your host and real estate professional here to bring you insightful conversations, expert advice, and powerful stories about what really goes on in life, love, divorce, and real estate. Are you ready? Let's get real. Hello, good day to you and welcome to The Real Talk podcast. How are you?
SPEAKER01: I'm doing great. How are you today?
SPEAKER_00: I'm doing very well. Thank you for asking. Today, ladies and gentlemen, I am speaking to Barry Simons. He is a real estate attorney and he sits with me on a wonderful, actually networking, rather educational, let's say it's actually an educational organization that many of you have heard me talk about before, which is the National Association of Divorce Professionals. And as everybody here knows, anybody who has tuned in before knows that we talk about life, love, divorce, and real estate. And there is such a thing as divorce, real estate, but there's a lot more that goes into real estate transactions. And Barry and I are going to talk about that today. So for those of you who are tuning in, I'd like to tell you a little bit about who I'm speaking with. And Mr. Simons, he actually acquired his undergraduate degree in 1987 at the University of Florida. School of Journalism, actually, in Communications, attaining a Bachelor of Science in Advertising and a minor in Business Administration. Thereafter, Mr. Simons attended and graduated from the University of Miami School of Law in 1990, and since then, pretty much, he has owned and operated his own law firm, primarily focusing on real estate-related transactions and litigation. Actually, you hold several memberships from what I see in different organizations, including the Florida Bar, United States District Court, Southern District of Florida. You've been actually in the grievance committee. I didn't know that. Yeah, the 11th Judicial Circuit. Cool. Yeah, that's actually that's very interesting, interesting things. Yes. Some interesting things indeed. And yeah, like Rotary Club, Miami-Dade, Pinecrest Rotary Charity Golf Classic and the chairman of that. And there's really a number of organizations here. And let's not forget the all-important National Association of Divorce Professionals, where I had the pleasure of meeting you.
SPEAKER_01: Yes, indeed.
SPEAKER_00: Thank you for joining me today. Tell us a little bit more about you and maybe your journey into real estate.
SPEAKER_01: Well, I'm a native Miamian. I haven't gone very far. The only time I've really been outside of Miami was four years undergrad at the University of Florida, as you mentioned. Right. Down here south here by the falls with my wife, Amy. I have two daughters. Two dogs, I'm surrounded by females. So my stop and fix is I'm a longtime high school football official here in Miami-Dade County, but 30 years in doing that. And office is here now in the Dayland area. I've been in the Dayland area for a number of years. We recently moved about a year ago, a walking distance from our old office in the Daytrend Center. Now we're right across the street from the Dayland Mall here. And I pretty much started focusing on real estate in about 1995 when I started writing title insurance for, as a lot of people in the industry know or call it, the fund. And slowly over the years, just graduated more towards, gravitated more just doing transactions less of a general practice, less litigation, and these days, primarily just focusing on real estate transactions through the state of Florida, also landlord-tenant work that we do perform for both landlords and tenants, lease negotiations, lease reviews, eviction work, and I've also had the opportunity, I've done quite a bit of the real estate tax appeals for clients and also have also kind of gravitated more towards of a specialty with exemptions either being lost like homestead or agricultural exemptions being lost or not granted to people here in the county. And so, you know, it's a, we have a, I have a sister that's been with me forever. She deserves a lot putting up with me for 20 plus years. and we're able to accommodate Spanish-speaking clients here as well too. As most people in our industry are, we do ride the ups and the downs for the real estate cycles, but we've been around for a while. As long as I'm alive and kicking, we're going to continue to be around. How about that?
SPEAKER_00: Yeah. Well, it sounds like you can easily weather some of those storms because you offer so many of the services that pertain to real estate. I mean, it's not just transactional work, which, like you said, can be seasonal. You know, if we're having a good year, a bad year, if the economy's up, down, whatever. But there are a number of other things that people might need a real estate attorney for. Yes. Like the ones you offer. Yeah.
SPEAKER_01: Right. Yeah, it's also everything, like I said, releasing, there's also residential or commercial, there's always a need for that. Obviously, every year, come August, when people are getting their notice of their taxes, you know, there's a very small time to appeal those taxes, creates a lot of activity, exemptions can kind of happen at any time. It's become very interesting ever since our last downturn, 2015, plus years ago where the county figured out too many people were getting homestead exemptions that they should not be getting and they actually have a task force that was started looking into that and they've continued that because they've been able to get a lot of money back into the coffers of the county. So I get a lot of phone calls over the years when people say, hey, I have a lien placed against my property for homestead. fraud, can you help me?" So that's interesting.
SPEAKER_00: Oh my gosh, you know, I didn't know that. Interesting. And now you said probably the most, one of the most interesting things that you said about that, about all of that is, I can't believe the recession was over 15 years ago already. Oh my gosh, you're right. It's 2024. Yeah.
SPEAKER_01: Yeah. It's been a, it's all, it's funny as we're going through it, that's all you could think about, all you could weather. And now it's, it's like, it's a thing of the past. It is. It is, but now… Short sales and foreclosures and all that craziness.
SPEAKER_00: Yeah, that's a very old trend.
SPEAKER_01: It's also, I guess, saying about maybe how I'm getting older now and can look back on what was going on back then. And I survived that. We survived it. We all
SPEAKER_00: We did. Cause I was part of that too. I can't believe it. I remember how old I was and what I was getting myself into. And I mean, it was a, it was a very interesting time. I was very lucky to be where I was at the time I was in corporate banking then. And so I kind of got dragged into this position that really was a blessing in disguise for me because it was incredible training. Um, you know, my listeners has probably heard me say it, where I was working in what we call the special assets department, which is a seasonal department, depending on where we are with the economy and how things are rolling. But I was tasked with writing all the policies and the procedures for short sales and foreclosures, because the bank that I was working at was a relatively small bank, considering, you know, some of the chases in the Bank of Americas. And we didn't have anything. We weren't prepared for what was coming down the pike. And so we quickly had to you know, get our bearings and gather our knowledge. And it was, we were limited really to two people that had any real estate knowledge, me and one other guy who was also a real estate guy. And we were young and we were hungry and ambitious and ready to learn. And, and so we were at the right place at the right time. I mean, we were working like 16 hour work days. We wouldn't sleep. We wouldn't even move from our, our desks. I remember I used to order from, um, Novacento, who actually became a tenant at the bottom, you know, the floor of the building I was in. And we would ask for sandwiches to be brought up to our desks because we wouldn't move.
SPEAKER_01: Was that, were you on Brickell? Was that that location?
SPEAKER_00: No, I was in the Gables. So I was at the Bank of Miami, which was formerly the International Bank of Miami at the Alhambra Towers. And then in 2010, I transferred over to Gibraltar Private, which used to be on the third floor of the Mercantile building way back when. None of that exists anymore, of course, because things have changed a lot in 15 years. But yeah, that was quite the time to be in real estate one way or another.
SPEAKER_01: It was interesting times. Fortunately, I thought when COVID first hit and we were all leaving our offices, coming up on four years ago, I thought, here we go again. It was our twist of fate for a couple of years. you know, the complete opposite here. I mean, it would just things just took off. I thought I thought it was going to be just I thought I'd be looking for almost another job. Literally, we first did. And as we know now, what happened here with the migration from not just other parts of the world, but from our country down here to South Florida, we were all very busy for for a while. And then, of course, you know, we can't have too much of a good thing for too long. Then the interest rates had to go up. And now we're all kind of like, all right, we have to slow down here a little bit. That's right.
SPEAKER_00: That's right. And last year proved to be a very interesting year because things slowed down substantially, even though values kind of remained untouched, you know, prices did go down. And I've tried to explain people the difference between pricing and values and all that kind of thing. And of course, this is a perfect segue to get into what we're going to talk about. You know, we had some some changes in the law and actually in family law and real estate law. We had changes in in several different legal realms. And moving forward to present day, right, we're having this new, we had this new law enacted not so long ago about the foreign ownership and registration requirements for people from certain countries who purchase properties in certain areas. And, you know, I'll be the first to say, I don't know very much about that because I don't actually work with many foreign nationals. Most of my business, because I deal with things like divorce and estate planning. I deal with a lot of domestic families, work with people who live in the suburbs and things like that. So I don't get a lot of that. But naturally, this is my line of work. And so I have to be informed somewhere or another. And this is why I rely on my attorney friends like you. So I know that you've been really working up on this and you have a lot to share. So I'm going to give you the floor and tell us, you know, what we need to know about what's going on with the foreign registrations.
SPEAKER_01: OK, thank you. Yes, I'll be the bearer of bad news. That's what attorneys do. Right. Sometimes it depends how you look at it. That's true. It's true. And it's it's burning. There's where we are. I will say that we we are all excuse me. We're all on a learning curve. with this new law, including the state that has had to promulgate some rules and try to help all of us figure this out. Basically, as of July 1st of last year, a law came into effect, I refer to as Conveyances to Foreign Entities Act or Senate Bill 264. And it laid out some laws that, I mean, I haven't, we've, in my industry, we've never really seen before or uncovered or had to deal with. To boil it down, basically, it restricts the purchase of certain types of properties here in the entire state of Florida for foreign principals from seven countries, which I'll list in a second. I kind of refer it to, although that depends on the crowd I'm talking to. If you remember George Carlin, the comedian, the seven dirty words, that's a pun, kind of the seven dirty countries, if you will. They are the People's Republic of China, Russia or the Russian Federation, Iran, North Korea, Syria, Cuba, Venezuela, although it's defined as the Venezuelan regime of Nicolas Maduro. I don't know why they did that. That's also maybe a little bit of a gray area that we're going to be working through. And this thing came into effect July 1st. For people that fall within the purview of the law, if they own property as of July 1st, everything was fine. The state cannot come and take your property away from you. What you do need to do or would need to do is register the property with two different, we couldn't even make it the same entity, but two different entities, an agricultural side and a non-agricultural side. Non-agricultural is with the Department of Commerce. And I have to, I'm sorry, I have to help myself here and look real quick and tell you the name of the other. The agricultural is the Florida Department of Agricultural and Consumer Services. But let me step back for a second. And to give you a really, this is the stunning stunning part of is this. After July 1st, people who are foreign principals, which we're going to talk about that definition today, cannot buy agricultural land whatsoever in this state. And they define agricultural land very simply or straightforward is they defer to the property appraiser in each county here in Florida, 67 counties here. And if you look up a piece of property on the property appraiser site, as we all do in our industry or even lay people, if you're looking to buy something. You know, it's classified residential or commercial or retail. It's classified agricultural by the property appraiser. You cannot buy agricultural land if you are a foreign principal from those seven countries, period.
SPEAKER_00: Even if you intend to change the zoning? Correct. So it has to be a different zoning altogether before you buy it?
SPEAKER_01: Correct. Agricultural is hands-off, hands-off. The second step there and the second step there is for people in China are restricted completely, completely from buying any property in the state of Florida right now with a very limited residential section exception that we'll talk about in a moment. The six other countries, the other The other thing, the other burden is the following. They cannot buy within 10 miles of what's called a critical infrastructure facility or a military installation within 10 miles. You can only imagine here in South Florida, it's almost impossible to say that you're not within 10 miles of one of these facilities. For instance, a military installation defined in the law is a camp, post, station, yards, whatever, you're accomplishing 10 contiguous acres on the jurisdiction Department of Defense. You know, in Doral, you have the South Com, Homestead Air Force Base down south. And no, the question typically is, Well, do we know where to find all these places? No. And I doubt the Department of Defense is going to give us a map or a guide to tell us where to find all of their installations. Unlikely. I won't read over all of the critical infrastructure definitions, but it's hefty, I'm sure. The airport, seaport, power plants, refineries, places like that. So you can only imagine here dotting the landscape of South Florida, how difficult it's going to be not to fall within those parameters. Again, same situation here is we don't have any expectation someone's going to give us a clear map or listing all those things or something that I can trust because when we get into some of the penalties here that people are facing, can face, they're significant. So it's almost like, what do you do? You got to go on your Google, I'm sorry, Google map search, you know, or hop in your car or put a pedometer on your sneakers or something, or try to figure out the mileage. It is crazy. for purposes of not trying to throw too much nitty gritty here on the podcast to kind of define things down. And it's kind of interesting because it's already been, let me also say that it took a long time, the law becomes effect July 1st. It really wasn't until the last couple of months or so that we've been getting some helpful information from the state of Florida, how to implement. these laws, how to understand these laws, how to register these properties.
SPEAKER_00: And abide by it, right.
SPEAKER_01: The title insurance companies have been great helping out their members like me, agents like me, trying to figure this out. So going back to if you did own, well, let me go back to a second to help people understand when we talk about foreign principles. Obviously, the countries themselves could not purchase these properties. A company formed in the laws of these countries could not buy a piece of property. But it really boils down to the people. And at first, it seemed pretty simple. Oh, if you're a citizen of another country, one of those seven countries, then you have a potential problem here. But it's really now focusing on, and I've kind of learned a little bit, on other areas a lot, like immigration, or the typical understanding of real estate, thinking of what a domicile is, like your homestead property. it's really taking shape now a little bit where the person lives or intends to live. I mean, you could possibly be a citizen of one of these countries, but if you're living here, working here, intend to stay here, there may be a safe harbor to where then you wouldn't fall under the foreign principle definition. And this is a moving target. And we're all in a situation where you're not looking to take a whole lot of risks right now. And so if I can, if I'm talking too much, please.
SPEAKER_00: No, no, no. This is good. Actually, I have a question then kind of based on what you're saying, which is so I presume if you have dual citizenship, right, if you're an American citizen, but also say like a Chinese citizen, you might have sort of like a loophole there, perhaps. I'm sure it's not as black and white and cut and dry as it sounds, but.
SPEAKER_01: That was the first question everybody kind of asked in a real consortium when you looked at the boy, the black and white of the law. And the answer right now is we need further clarity. It's a gray area. It's not what they call an absolute if you have dual citizenship. it really tends to be trending towards domicile. If I could, again, I'm trying to jump all over the place because there's so many different sections, areas of law, but for the law, it became into effect, you'll have first a consortium of Chinese, nationalists or people with Chinese citizenship, let's say, or domicile, who are going to be aggrieved by the law. The ACLU filed a lawsuit on their behalf back in May of last year. At first, they tried to get an injunction to stop the law from being enforced. That didn't happen. This lawsuit is continuing right now. There's no end or resolution to the lawsuit right now. Obviously, if they're granted favorable relief, the Chinese people or persons, if you will, consortium, I'm sure that would also fall to the other six countries as well. Anyway, where I'm going with all this is that when I talked about this domicile issue, the state of Florida also took a position in their paperwork about some of the things I was saying is if you're living here in this state, if you're working here in this state, you already owned a home in this state. that you're satisfying a domicile requirement to move you outside of the purview of this law. So it's not just citizenship. So yes, it would be helpful. You could have dual citizenship. And again, if you're living here and on a permanent basis or intend to be, it seems as though there's an out under this law. That's kind of the appearance right now. But again, it's a situation where it's still being vetted and we're all trying to figure it out. Let's just now look at now, if you did own the property or did own property prior to July 1st, there's two different platforms you're supposed to be registering with. One is the Department of Commerce for the non-agricultural land. The other one was the Agricultural and Consumer Services for ag land. The Department of Commerce has come out with rules and regulations and certain definitions on the law and what you're supposed to do. And we've been doing registrations for people. And here's the important thing is if you don't register timely, and I'll go back to some deadlines in a second. But if you don't register timely, you face $1,000 a day fine, $1,000 a day fine until you do register. And let's say you've, and I always, now when I think I'm at who's enforcing this, which I have no idea how this is going to be enforced or figured out. But what happens is if you do get these fines, Ultimately, even if you do register, say you cut off the fine or maybe you never register, a lien can be filed, the state can file a lien for the money that is unpaid. And then they have the right to bring basically a civil forfeiture action or foreclosure, if maybe people are more familiar with, to literally take the property back or away from you, so to speak. So it's pretty significant that that goes back into if you want to take some risks here and, you know, dual citizenship or domicile. That's where it gets kind of tricky, because if you're found if you're found not to have done things correctly, there's significant fines there, as you can see.
SPEAKER_00: And that's the penalty is pretty big. Yeah, if somebody doesn't have, let's say, $30,000 because they didn't realize that they were, I don't know, they should have registered 30 days ago, two months ago, let's say, $60,000. It's not everybody who has $60,000 lying around for that fine. They could probably fight it, I presume. You can always do anything you want in court, but by the same token, if you can't afford it, then what you're saying is that the government has the right to foreclose on you.
SPEAKER_01: Eventually, yeah. Now, again, that's the nth degree, and it's not happening yet, but yes, that's how the law is written. That ability of the state is there. For the non-agricultural land, the Department of Commerce, they promulgated their rules, which were effective January 4th. So, originally the deadline for them was supposed to be December 31st to register. The promulgation of these rules, you know, I have until February 3rd to register, which I believe is a Saturday. So, really, February 5th, Monday, would be your deadline to register, if you fall within the purview of this law, to register for non-agricultural land. Agricultural land, the deadline was supposed to be January 1st. They have announced what they call their rules. They have not been finalized, so there probably is more of a time period to register with the agricultural land as we know it right now. Let me go back for a second, talking about penalties, since it's in my head right now, and we can talk about enforcement, although we have no idea how this is really gonna be enforced yet.
SPEAKER_00: Yeah, they're still working the kinks out.
SPEAKER_01: We're just gonna figure this out. Here's the reading right now, off the top of my head. And actually, this is very important for real estate agents, such as yourself, and closing agents, and let's take a seller. Let's just take the seller of a piece of property who is an American citizen and is domiciled here. In order to get in trouble, you have to knowingly violate the law. That's a pretty high burden for someone to meet. As long as you don't know you're doing anything wrong, you're fine. But a knowing violation by a seller is a misdemeanor, basically. The same for the buyer, it's a misdemeanor. And I believe for a Chinese national, it's actually elevated to a felony if it's found that they've committed a transaction such as this. What has been suggested or what is out there. or it's actually in the statutes, by the way, and very helpful with our title insurance underwriters that helped us, got ahead of this a little bit, was the affidavit is now being signed at closing by parties, really the buyer, saying that I am in compliance with the law. For instance, the affidavit may be about a page long, and there's several pages of attachments referencing the law and the statutes, saying I'm in compliance with the law, I've read the statute, I'm not doing anything wrong. And you just keep that in your file for a rainy day. And it's a good defense in case the transactions are requested. And for me as a closing agent, and probably for realtors too, we've only really had to get into, besides non-real estate related items or situations, I've never really questioned a person, you know, per se, about really personal things like, you know, we have to get involved in social security numbers or tax ID numbers for companies for what's called, for tax reporting purposes or people in the industry, the FERPA laws about, you know, being a foreigner. I've never asked anybody for a birth certificate or citizenship papers, things of that nature before. And if you think about it, Who am I to say someone comes in the office? I go, so where are you from? Yeah. In the city. You sure?
SPEAKER_00: Yeah. Are you sure?
SPEAKER_01: So it's kind of gotten a little interesting. Well, I guess the other thing I'm trying to bring forth to people here watching the podcast or listening is that I've never really thought about that. I mean, how do I know? You could have been born in one of these countries, but now you're here for 30 years. So now it's kind of like we're almost having almost every, unless I know you personally, let's say. All of our buyers now are probably going to be signing affidavits for closings. Or better yet, if I'm representing a seller, or if you are a seller, you want to see an affidavit like that signed at your closing in case there's ever a knock at your door one day about this action. It spreads. I'm not trying to scare the real estate professionals or people who are selling, but the law spreads a little bit as it does into these other areas or to other people, not just these foreign principals from these seven countries, for instance.
SPEAKER_00: I'm glad you brought that up because when there was talk of this law coming around, and I think we're not the first state to enact this law. I want to say there are another number of states that have done something similar.
SPEAKER_01: I haven't jumped into it too much, but yes, there are other states with some other similar types of law. Yes.
SPEAKER_00: Right. So I, you know, obviously we heard the rumor that something like that was coming. And one of my colleagues and I looked at each other, we're like, wouldn't we be violating some form of, you know, law by asking somebody where they're from? You know, we shouldn't be We have to be careful not to violate somebody's privacy. And there are things that are in place for us not to know. Basically, we can't, you know, discriminate somebody based on a number of things. And we were like, I thought national origin was one of those. How do we get around that? And then, you know, then we didn't think about it again. And then, yeah, then the law came into effect. And like I said, I haven't had absolutely any experience with it because I haven't worked with any foreign nationals. But it is very interesting, as you say, that you really Sometimes you, let's be honest here, sometimes you look at someone and you say, I think this person could be from the Asian countries. You may not know exactly if they're from Japan or they're from Korea, whatever, but you have some idea because of their features. And so you typically pass some form of judgment in identifying where they might be from, but Maybe they are. Maybe they're not. You know, they could totally have been born in the States. And then you might confuse somebody for being, you know, born and bred in the United States. And they may actually be from somewhere else because maybe their parents are from different countries. So, yeah, it's not as clear cut as you would think it would be. And so I'm curious to know what kind of risks real estate professionals run by not having, say, like proper forms or by guiding the conversation in the right, let's call it the most appropriate way to determine whether or not you could take them on as a client or not.
SPEAKER_01: Right. Well, once they want me to go back, answer maybe one question is or how you approach that from us is going over what you said about maybe privacy or upsetting somebody. Right. It's just easier to go. Here's this half of David's sign. And I ask any questions, you know what I mean? So that's for us. It's just easier to go here, look, sign. And that way, you know, there's no like I said before. So where are you from?
SPEAKER_00: Conversation.
SPEAKER_01: Where were you born on that stuff? But again, not again to yell fire in a crowded theater here, it's very clear in the statute, you have to have knowledge. You, the real estate person or agent, you have to know, which is a very high level of a standard that you have to know that you were your client or you were assisting in breaking the law. And there's a lot, so there's a lot of ways you can say that I didn't know. So for instance, it's even written in the law, by the way, I keep saying the law, the statutes, the law, the law, the law is going to get you, that the affidavit is not required. So for instance, if you're in a transaction and such an affidavit is not executed, It doesn't lead to some kind of automatic problem or discipline or penalty or anything like that. It's just it's just saying it's kind of an inference. It's just a layer of protection. Right. But ultimately, even for me as a closing agent or attorney. I have to have knowledge that I'm assisting in breaking the law, basically, to find myself in some kind of trouble. So there is that still very high standard for the professionals that are kind of around or outside the deal. So, you know, because, you know, we all know that, we know from our own experience, people will, you know, lie or maybe do what they need to do in certain situations.
SPEAKER_00: And I do attorneys all the time.
SPEAKER_01: And if we can show that we didn't knowingly assist in breaking the law, then we're all going to be just fine. Again, that's a very high standard to be met for us to get in some kind of a problem or trouble.
SPEAKER_00: That's interesting. It just reminded me now, I'm sure you're aware in corporate banking or say in a financial institution, you have different departments. One of the departments that exists and has existed for a very long time is BSA, which is the department that takes care of making sure that all loans, all accounts, all transactions are held against a standard to prevent theft, money laundering, fraud, et cetera, et cetera. And there are these lists that I'm not going to get too into detail, but there are these lists of people that they cannot lend to depending on what country they are coming from. Right. And so, you know, and that's part of, you know, dotting your I's and crossing your T's before you, you know, give a loan to somebody who's asking for money no matter. And it's on both the residential and commercial sectors. It makes no difference. And I'm sure that's changed over the years. I'm sure that there are countries that come on and fall off that list. It's the OFAC list. And, you know, and so this kind of reminds me of that. And I think about that now. And I wonder, because I read somewhere, and I actually have that article sitting on my desk to read it. I haven't gone through it yet. But it said something about Miami being ranked number two in global relocation. So if we are, because I had read an article many months ago about how China, and this is obviously before the law, that we were getting a lot of Chinese citizens coming, obviously Canadians, we had Brazilians, we had a number, but a number of different countries, but a lot of, you know, a couple of those countries that were on that list were China and Venezuela. So if, you know, Obviously, you know, South Florida is a target for just about anyone and everyone. And this is on a very personal note. I'm not really sure why I think it's too hot here, but that's me. But a lot of people want to live here. So now that we are, let's say, preventing or putting kind of a really, you know, strong hold on those countries, you know, or their citizens from being here, I wonder how that's going to affect the demand that we have for property in South Florida and obviously how that's going to affect value and competition.
SPEAKER_01: Absolutely. I mean, absolutely. I mean, just think about the influx over the last, well, 10 years for sure. Yeah. Will be our Doral area here in South Florida and the Venezuelan influx to that area. Now, not all, it's not all, not all of every, all the Venezuelans would have been subject to this law, but I'm sure a decent percentage of them would have been. Even if it's half. And you're correct. It's kind of like there was probably some good intentions. Maybe someone originally sat down and had some good intentions about this law originally. Maybe you're dealing with the agricultural land by certain people from certain countries. I'm guessing here. I'm not very much in politics here. But you're right. I mean, just think about now you've shrunk the ability the number of purchasers out there for properties in the metropolitan centers, Tampa, and Orlando, and Miami, and West Palm Beach. Absolutely, under this law. You're right. Ultimately, you may be impacting a seller, of course, for instance. Although we know there's also some changes coming now with the condominiums and their ability to get financed. And that's kind of shrinking the pool there. Well, here's more shrinkage of more available buyers. I mean, absolutely. It's the classic, you have a little bit of a domino effect that right now, there's been so many other probably situations through our lives where all of a sudden, or in our industry, we said, wow, look at this. Why is this happening? Or look what's happening now is because maybe a law was implemented, what, a couple of years ago. So if this thing continues on, it's probably going to be a couple of years where everyone's going to finally wake up when people can't see how maybe have difficulty selling their home or their property or getting what they thought it was worth. That's when all of a sudden the people who had no idea about this law are like, what in the world is going on here? Like ourselves, we're seeing the possibilities now of what could possibly happen. Absolutely.
SPEAKER_00: Yeah, for sure. Cause and effect. And like you said, a lot of times those things take a while before they materialize into something that you can see that really affects the market or whatever that may be. And now this may seem like a silly question, but just to confirm it for people out there, this is just pertaining to purchase and sale, not tenancy, right? So if you're from any one of these countries and you come here, you know, you're probably applying for a visa or something, maybe you're a student and you need to rent somewhere. Renting is out of this equation.
SPEAKER_01: Yes, that is not with it. Yes, that is not a concern. That is not part of the statute in the state law. That is correct.
SPEAKER_00: Right.
SPEAKER_01: There is one little wiggle I'll tell you about, which another one is unforeseen things in the law is the following. Everything is hunky-dory right now with a piece of property. Let's say the owner dies, and the owner, via estate planning, has given the property to a beneficiary, beneficiaries in one of these seven countries. The property is within the parameters of being within the 10 miles of the military installations or critical infrastructures or ag land. Upon that occurrence, if the property is then, would then float through to the death of the owner, to these beneficiaries who fall under the purview, I keep, purview of this law, of the statutes. They have to, even though they're innocent, they didn't do anything, you know, on purpose, so to speak. Right. Potentially break the law or anything like that. They have to, what's called, divest themselves of the property within three years, basically sell.
SPEAKER_00: Interesting.
SPEAKER_01: Take that one more step. You are a mortgage holder on a piece of property, and you are a foreign principal of one of these seven countries. Property falls within, again, the classifications under the law. You go to foreclose because you weren't paid by the owner. You go all the way through the process, and the process people know is you get a judgment, it goes to a sale. A lot of times the person foreclosing or like the bank takes back the property. That person who takes back the property is a foreign principal from these seven countries, and the property is within the classifications of this law. Same thing, three years to divest, even though they followed the law, so to speak, in acquiring back property they were legally entitled to. So yeah, it's kind of, yes. Can you imagine being the beneficiary of someone who legally, I mean, you get the mortgage eight years ago, seven years ago, five years ago, and you've legally walked into a piece of property, and now the state's telling you, yeah, you got three years to get rid of it, or we have enforcement actions we can bring against you, basically.
SPEAKER_00: Right. That is interesting because most people, they limit themselves to just thinking, well, I just, I just need to be the one to buy, you know, to, to have to look into the statute to see if it applies to me. But no, you can come across property in a variety of ways. It's not just signing a contract and say, I want to buy this property. You could inherit it. Or like you said, you, you might have been an investor here for many years and you have property and people rent it from you or, Or rather, you do what we call seller financing, which is what I think you were talking about. So if you do hold a mortgage for someone else here and they default and you happen to take that property back because that's the way that your documents are written, and you happen to fall within that criteria, you're going to have to sell. Just to be clear about the registration, because it's a registration. If you do buy a property, if you are a citizen of any one of those seven countries and you do decide to buy a property and it happens to fall outside of that 10-mile radius, you happen to find the one little piece of property that falls in the right area, then you are required to register that.
SPEAKER_01: Is that how that works? If you fall outside the law, you're okay. if you fall in that sweet spot. Yeah, because it's kind of the, it's like the and, and, and, or all these contingencies have to be met. So foreign principle, you've got to be within the 10 mile radius, well, agricultural land is out, period. And then if you are, well, if you're a Chinese domiciled, you're completely out. I mean, you're just out, except for the one exception I forgot to talk about, we'll talk about in a minute. But if you're from the six other countries and you're outside, even if you are a foreign principal on those six other countries, if you're outside that radius, if you will, the 10-mile radius, you're okay. So yes, there are going to be some spots somewhere in the state. But again, I mean, you may not want to be living outside of a very- That area, right. You want to be close to it. An area where there's not all the things you'd like to do, so to speak.
SPEAKER_00: Is there a fee to register then your property?
SPEAKER_01: There is not currently, and I don't know if there ever will be, there is not a fee with the state to register, which is nice. Unlike, of course, when people may be familiar with when you open up a company with a division of corporations and now the annual reports are due, you file your fee for annual reports. There's no fee with the state to register.
SPEAKER_00: Is it annually? Do you have to re-register every year?
SPEAKER_01: So far, from what we can see, it's a one-time situation. But what you are able to do is if you do sell the property, you're able to remove yourself from the role or say, why does it apply to you anymore? Right now, it appears to be a one-time act, basically.
SPEAKER_00: Okay, so it's just basically for the state to have sort of a ledger as to who lives where, particularly if you live in those, or you're from those countries, right?
SPEAKER_01: Yeah, it is a bit of a, it is, well, it's a secure platform. We've been registering, I've been registering my clients through me, through like an account I have, but people are able to do it on their own as well if they'd like to. So, you know, I don't know what they're doing with the information or where it goes. It seems to be safe and secure, but it is kind of something, again, I haven't really, I've never come across something like this before, to be honest with you. The one exception, I'm sorry, I just want to tell everybody that does apply, is for a lease, they were, you know, smart enough or beneficial enough to give a limited exception for basically a residence. It has to be less than two acres in size, and you need to buy it in your name, the natural person, your name, no entity, no trust. Still cannot be within five miles of a military installation, just a military installation. And you've got to show, again, some type of intention that you intend to live here on a permanent basis. or you're applying for some type of immigration status that will allow you to stay here on a permanent basis. So there are little wrinkles there. But people can still, in theory at least, maybe buy a condo or buy a home not within five miles of military installation in your name only to show intention that you intend to reside here on a permanent basis. One more exception to that, which is kind of very vague, it's called the diplomatic exception. And all it says is basically that it doesn't apply to a foreign principle that requires real property for a diplomatic purpose as recognized by the federal government. So that's a whole other level. I'm not even sure what that means or how you do that, but I guess if you are a diplomat and they can't kind of- You have to live here, right?
SPEAKER_00: So they'll overlook it.
SPEAKER_01: Yeah, they live under their own rules as we kind of know when it comes to certain laws. So I'm sure there's a way that the federal government will somehow let everybody know that that is okay or not, basically.
SPEAKER_00: Right, right. OK, so I've learned I've learned a lot about that topic. And yeah, I could see how some people might find that uncomfortable. I don't know what the real estate laws look like in other countries. I don't even know what it looks like in other states, except for the ones, obviously, that have What is that? I just lost the term. You know, when you have other states that mirror, you know, your real estate law is also a mutual recognition. So except for mutual recognition states, obviously, I don't know how other states function, but I guess time will tell. Like we said, time will tell as to how this is going to affect any one of those transactions now and into the future.
SPEAKER_01: Well, that's for sure. And one more quick little wrinkle that I know is in there for people who may be familiar with and probably yourself is the EB-5 programs. They are accepted from this law. So if you're somebody that's falling under that program, because that was meant to stimulate the business and economy. that they are carved out of this law, basically. So that is another exception if you fall into that parameter. I've heard and seen some other conversation about other types of visas. Right now, apparently, that's the only one that clearly is cut out of this law, basically.
SPEAKER_00: Interesting. Now I'm thinking of all our immigration attorney friends. I know that we know one in common for sure, Alina Santana. I'd be happy to chat with her again and see what's going on on her neck of the woods.
SPEAKER_01: I would tell you right now that the idea of how at times confusing this can be is if I had an immigration attorney here with me today talking to us, they'd have their own feelings or definitions about domicile and intentions versus what a real estate practitioner might have. I bet. So there's definitely a colliding of laws and theories and opinions here, to say the least, that's for sure.
SPEAKER_00: Sure, sure. Well, I guess it's like anything else. You start something new and you're going to have to work out the kinks and eventually you'll see how something doesn't work or where it works well or where it doesn't work at all. And then you kind of just have to roll with it until you get a product that does what you want it to do, I guess. Right. So we'll see. Yeah.
SPEAKER_01: I mean, as you as we can see, the state, not that anybody would really know, but of course, we were all chomping at the bit. When can you register and how do you register? And I took them along. The other thing I've learned just because a law is made doesn't mean the powers that be or the state or the local governments are ready to handle it. Yeah, they may. Right. Figure to figure this out. And that's what that's true to what's happening here right now. And again, I keep alluding to I can't I just keep thinking through where I have no idea who's enforcing it. You know, the departments that you're registering with, I guess they're saddled with enforcement, but how they're going to enforce it, how do they know to be seen to be determined?
SPEAKER_00: Yeah, that's true. It's going to take some catching up, I'm sure, until they get into a rhythm. And we're talking about the government, so they usually take a little longer than usual.
SPEAKER_01: That's a catch-up. That is for sure. That's why I guess they put some scary penalties in there to get everyone's attention or try to get you towing the line, so to speak.
SPEAKER_00: Exactly, exactly. And I'm thinking I might do a podcast with a business attorney because there is another whole reporting situation for small businesses. Yes. And I don't know if it falls along the same lines. In other words, I don't know if it serves the same purpose to kind of just keep track of everyone or if it has another
SPEAKER_01: Well, it's just one of the terms, one of the key terms in that new law or provision is transparency, I believe.
SPEAKER_00: Transparency.
SPEAKER_01: And that's what that's what they're shooting for. And I've only, like I say, I've spent some time knowing a little bit about what we talked about today. As I say, enough for me to get in trouble. But that other law, you're talking about the corporate transparency. Wow. I mean, that seems a little clunky, too, and a little interesting. Yes.
SPEAKER_00: Yeah, I've got, I've got to register my own company soon. So I read through it recently and I'm like, I think I fall under this. Most people do. So I'm going to have to get on that. I think we have until the end of the year or I think January of end of January next year.
SPEAKER_01: I think we do have some for the stuff that's already been. The companies have been filed previously, I think we still have some time, but the new ones filed now are, they've got- I think they have 30 days only.
SPEAKER_00: Correct.
SPEAKER_01: They have a short time period to comply or do whatever you need to do to comply, yes.
SPEAKER_00: Right, right.
SPEAKER_01: You must be getting quite an education in all these different podcasts from all these different people.
SPEAKER_00: You're like, I, you know what, I love it. And that's really the premise of this podcast. I noticed, um, you know, as I'm sure you do, you have a lot of business meetings, coffee meetings, lunch meetings, all manner of professionals and their purposes to network and get to know about your colleagues and people in your networking organizations, what they do, how they do it and how you can help each other. And after so many of those meetings, you know, I've, I'm older than I look, I'd like to think. But I started to realize that there are a lot of people out there that could benefit from the same information that I'm being privy to. And I'm really only one person. I can't be with everyone that I know, you know, in my contact database, my family, my friends, you know, and even the people that I don't come across. I just happen to be, by nature, somebody that likes to be well-informed. I don't like to go into anything, no matter what it is, not knowing what I'm doing. I feel like I can do so much better if I know what's expected of me, if I know the rules, if I know what I'm up against so that I can make an informed decision. And then I can take responsibility for whatever I do or don't do. And I think most people are ill-informed. I think most people are ill-informed. And so, you know, I started when I started thinking about this podcast, I started to wonder what can I put out there for people to benefit from? And then it came to me, you know, at some point or another, I mean, everybody needs to live somewhere, right? So at one point or another, you know, I would say the grand majority of people buy a property at some point. But it doesn't all just happen overnight. These things culminate. And all these laws, these statutes, these decisions, they will eventually kind of put the cones in your way to determine whether or not you're going to be successful at purchasing. And that could be on a relationship level. It could be on a financial level. If your credit is bad, if you've made good or bad investments, if you're moving, you know, cross state lines or, you know, if you're migrating, I mean, it could be anything and everything will eventually affect you. And that could eventually have, you know, a long-term effect as to whether or not you're gonna be able to buy a property or not. And so I just realized that everything just kind of ties in together. It's life. It's life.
SPEAKER_01: It is. It's very intertwined. I mean, that's for sure.
SPEAKER_00: It is. So I thought I'd bring this, you know, give everybody a chance to speak their mind, talk about, you know, the important things that are happening, and hopefully it'll change someone's life somewhere.
SPEAKER_01: or surely the information available is great. I mean, the more informed you are, the better off you are as well, that's for sure. So sticking your head in the sand is, well, not the best way to go about things, I'd say.
SPEAKER_00: I agree. I know there's some people who rather be avoidant. They'd rather just not face it. And if that works for them, great. I cannot. I like to face things head on. Sometimes they're very uncomfortable, but like you said, it's better to be informed than not.
SPEAKER_01: Absolutely.
SPEAKER_00: I can't thank you enough for your time, for sharing all this valuable information. It is a lot, but I'm glad that you are working through it. I know you're going to be my go-to person if and when I run into something like this or anybody who needs that kind of information or that kind of assistance, you're going to be my guy. So I hope to be able to connect with you again. I know I'll see you shortly for our NADP luncheon. So thank you for being a valuable member and thank you for sharing your time.
SPEAKER_01: Well, my pleasure. I really appreciate you having me and you made this a lot easier than I thought. And my first time doing something like this and I enjoyed it and look forward to seeing you again soon.
SPEAKER_00: Awesome. Thanks so much, Barry.
SPEAKER_01: OK, take care.
SPEAKER_00: Thank you for tuning in to this episode of The Real Talk. We sure do appreciate it. If you haven't already done so, be sure to subscribe to the show wherever you consume podcasts. This way you'll get updates as new episodes become available. And if you found value in today's show, we'd appreciate it if you would help others discover this podcast. Until next time.