USA – FLORIDA Law and Practice Contributed by: Eduardo M. Soto and Fabio Giallanza, Weiss Serota Helfman Cole + Bierman, P.L
their interest in the application exceeds that of the general member of the public, are generally recog - nised as having standing. This provides them with additional due process and an opportunity to pre - sent their objections and case against an application. Finally, there are other methods to object, such as comprehensive plan consistency challenges that are original actions rather than appeals. Generally, zoning restrictions are listed in the land development regulations. They are enforced when an applicant presents their proposed plan for develop - ment. A zoning official may make comments and dis - allow any aspect of the development proposal which is contrary to the land development regulations or Comprehensive Plan. When approvals are granted, they may carry conditions or restrictions which may be enforced by local code enforcement officials, by withholding additional development approvals for lack of compliance, or by an action in court. 5. Investment Vehicles 5.1 Types of Entities Available to Investors to Hold Real Estate Assets Investors in US real estate commonly hold assets through a variety of legal entities, including corporations, partner - ships, and limited liability companies (LLCs). The most frequently used vehicles are LLCs taxed as partnerships and corporations, depending on the investment’s objec - tives, number of investors, financing requirements and exit strategy. LLCs are widely used because they offer flexible governance, limited liability for members and ease of customisation through operating agreements, making them well suited for joint ventures and multi- investor projects. Partnerships, including limited partner - ships are used, although less often, particularly where roles between managing and passive investors must be clearly delineated. Corporations are another common vehicle, especially for large or institutional investments, as they provide a well-understood governance framework, centralised management, and clear equity structure. In more com - plex investments or multi-asset portfolios, sponsors often use single-purpose entities (often an LLC), with each property held by a separate entity to isolate lia -
bilities and simplify dispositions. Overall, entity choice is driven primarily by liability protection, governance flexibility, financing considerations and long-term investment planning. 5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity Each entity type used in real estate investment has distinct structural and legal characteristics that affect operations and taxation. LLCs and partnerships are generally treated as pass-through entities for US income tax purposes, meaning income, gain, loss and deductions are allocated directly to owners in accord - ance with the governing agreement. This structure allows investors to tailor economic rights and man - agement authority with significant flexibility, but it also requires detailed operating or partnership agreements to address distributions, capital accounts and transfer restrictions. Corporations, by contrast, are taxed as separate enti - ties and are governed by statutory corporate law, with shareholders holding equity interests and a board of directors overseeing management. Corporate struc - tures provide predictability and administrative simplic - ity but involve an additional layer of taxation on earn- ings and distributions. Disregarded entities, such as single-member LLCs, are treated as extensions of their owners for tax pur - poses, although they remain distinct legal entities for liability protection. Across all structures, state and local taxation must also be considered, as income derived from real property is typically taxed where the property is located. The choice of entity therefore requires balancing govern - ance needs, investor expectations, compliance obli - gations and the projected lifecycle of the investment. 5.3 REITs Real estate investment trusts (REITs) are a well- established and commonly used investment vehicle in the United States, including Florida. Both publicly traded REITs (listed on US stock exchanges) and private (non-traded or private placement) REITs are widely available. REITs are generally open to foreign investors, subject to US tax rules such as FIRPTA.
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