Foreign Investment Legislation Sent to Georgia Governor; Notarization Bill Fails
April 9, 2024
As we have previously covered, the Georgia state legislature has been considering legislation that, if enacted, could have major implications for CRE attorneys and investments. The legislature adjourned March 28:
- Limitations on foreign ownership and investment in real estate passed and were sent to the Governor (SB 420).
- Closing procedures and remote notarization changes did not pass (SB 425).
Why it matters: The limitation on foreign investment and ownership in real estate follows the trend of 15 other states that have enacted similar provisions, most notably Florida SB 264.
CRE Closings and Remote Online Notarization: As proposed, Georgia SB 425 could have impacted the processes by which attorneys handle commercial real estate closings, including, but not limited to, multi-state, multi-property transactions. The bill also included criminal penalties for closing attorneys in the defined circumstances of this bill.
- The Senate passed the bill 51-4, but the House did not act on the legislation before it adjourned.
Limitations on Foreign Investment in Real Estate: Georgia’s HB 1093 and SB 420 bills are part of a wave of legislation being proposed throughout the nation (including Florida) that aims to impose “restrictions on foreign investment in real estate.” SB 420 was passed by both chambers and sent to Governor Brian Kemp (R-GA), who has not yet signed the bill.
- The bill would prohibit a “nonresident alien” of a foreign adversary from acquiring directly or indirectly any possessory interest in agricultural land or land within a ten-mile radius of any military base, military installation, or military airport. The definitions would also include U.S. legal entities with at least 25% of their ownership comprising “nonresident aliens.”
- Criminal felony penalties could apply to persons facilitating transactions that violate the law, including commercial closing attorneys.
- The federal government’s Committee on Foreign Investment in the United States (CFIUS) includes a review of foreign ownership of real estate near sensitive sites. State legislation could complicate this review process.
What's next: If Gov. Kemp signs the bill, it will likely face challenges in federal court.
For more information or to get involved, contact David McCarthy (dmccarthy@crefc.org)