As relations between the United States and Russia continue to deteriorate after the U.S. joined Germany in pledging battle tanks to Ukraine in early February 2023, many people are wondering if this will worsen the impact that sanctions have already had on Florida real estate. Here’s what to know.

Seller Due Diligence 

Commercial real estate owners and sellers should be on the watch for Russian oligarchs or their family members attempting to evade American sanctions by investing in multifamily homes and retail property. 

There are a few things you can look for that may indicate this:

• The client is on the OFAC list of Specially Designated Nationals and Blocked Persons.
• The client is based in or has significant operations in a sanctioned country.
• The client tries to structure their purchase through shell companies or other entities to conceal their identity.
• The client is particularly interested in purchasing property in cash.
• The client is reluctant to provide information about their financial history or sources of income.
• The party has been involved in activities that violate U.S. export control laws or International Emergency Economic Powers Act (IEEPA).

If you have any suspicion that your client may be violating Russian sanctions, you should consult with an attorney before proceeding with the transaction. Violating sanctions don’t just have penalties for Russians – you too can incur civil penalties of up to $356,579 or double the amount of the transaction, whichever happens to be greater.

Strategies For Florida Real Estate Sellers To Mitigate The Impact Of Russian Sanctions

There are many ways that Florida real estate sellers can help mitigate the impact of Russian sanctions on their client base and bottom line. First, diversifying your client base can help you establish new relationships in different markets, so you can continue to do business regardless of how strict the sanctions against Russia get. 

Another strategy that Florida real estate sellers can use to mitigate the impact of the sanctions is to seek out alternative financing solutions. This could involve partnering with developers who are willing to provide financing for projects or working with lenders who are not affected by the sanctions. 

Feinstein Real Estate Litigation & Business Law is an experienced South Florida law firm that is committed to helping property investors and developers succeed. Call now at 954-767-9662. Serving Fort Lauderdale and surrounding areas.