USA - FLORIDA Law and Practice Contributed by: Jeffrey R Margolis, Marc S Shuster, James L Berger and Evan Rosenberg, Berger Singerman LLP
cal infrastructure facility, all of which are defined in the law. Additionally, Chinese companies and persons domiciled in the People’s Republic of China who are not US citizens or lawful perma - nent residents of the US face more restrictions and heavier penalties than other foreign princi - pals. To comply with the law, buyers are required to provide a signed affidavit affirming they aren’t foreign principals. Federal Level Historically, the USA has not heavily regulated foreign investment in real property, but some laws and regulations governing investment and ownership of real property are unique to foreign investors. Although some states like Florida impose certain additional restrictions, foreign investment in US real property is primarily regu - lated by federal law. Acquisitions can be financed by equity invest - ment or debt, or by a combination of both, as is typically the case. The investors will often agree in advance to contribute or loan additional mon - ies to the acquisition vehicle. An investor’s failure to contribute as agreed may cause that owner’s equity interest to become diluted relative to the other owner’s interests and may also result in a suspension of that owner’s distribution rights. 3.2 Typical Security Created by Commercial Investors 3. Real Estate Finance 3.1 Financing Acquisitions of Commercial Real Estate A mortgage is the most common security instru - ment used to secure borrowed funds for a com - mercial real estate venture in Florida. A Florida mortgage imposes a perfected lien on the real property described in the mortgage, if it is in
proper form and recorded in the public records of the Florida county in which the encumbered real property is located. 3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders Apart from various criminal laws directed at money laundering and influence-peddling, the USA Patriot Act intends to identify, verify, and record information on parties to a loan transac - tion. The law’s focus is to verify that the parties do not engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any anti-terrorism law, including the Patriot Act or those that involve “blocked persons”. Blocked persons include a person listed as such or made subject to an executive order of the President or a person or entity with which any bank or other financial institution is prohibited from dealing or otherwise engaging in any transaction by any anti-terrorism law. 3.4 Taxes or Fees Relating to the Granting and Enforcement of Security Florida imposes a documentary stamp tax, which is an excise tax imposed on certain documents executed, delivered, or recorded in Florida. The documentary stamp tax on notes or other written obligation to pay money is USD0.35 per USD100 (or portion thereof) – ie, 0.35% – of the obligation evidenced by the taxable document. The tax is due on a note or other document containing a promise to pay an obligation that is executed and delivered in Florida. If such a document is not secured by Florida real property, the maximum documentary stamp tax is USD2,450. If the indebtedness document is secured by a mortgage encumbering Florida real property, the stamp tax is due on the mort -
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