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National Security Concerns Can Block or Unwind Your Real Estate Deal

October 2018
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Recent federal legislation aimed at reforming the review process of the Committee on Foreign Investment (CFIUS) and expanding the authority will bring more real estate transactions within CFIUS’s reach. CFIUS has the power to scrutinize any foreign investment in a real estate transaction that involves a purchase, lease, or concession of U.S. real estate that is located within or functions as part of an airport or maritime port or is in close proximity to a U.S. military facility or other sensitive governmental operation.

This means that CFIUS’s authority now extends to developed and undeveloped parcels, leasing, and acquisitions meeting the above criteria. Presumably, CFIUS will prescribe forthcoming regulations that define “close proximity.” Single-family units and property in urban areas are excluded.

The effect of these changes will be to impact real estate transactions that involve foreign interests. Whether the new law slows deal activity remains to be seen, and future regulations will help define what teeth this new law has.

Read the article here.

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