Proposed Act Forces Chinese-Affiliated Entities to Sell All U.S. Farmland and Residential Property Within One Year

This new legislation, dubbed the “Protecting Our Farms and Homes from China Act,” is a massive policy shift aimed at restricting the ownership of U.S. land by entities connected to the People’s Republic of China (PRC). Simply put, the bill makes it illegal for a “covered foreign entity” to buy or lease U.S. agricultural land. For those entities that already own farmland, the bill mandates a full sell-off within one year of the law passing or face severe penalties.

On top of the farmland rules, the Act imposes a two-year ban on these same entities purchasing residential real estate (think single-family homes, condos, and the land zoned for them). Like the farmland provision, any residential property they currently own must also be sold within that one-year window. This isn't just a slap on the wrist; the enforcement mechanisms include huge daily fines, potential criminal charges, and even the forfeiture of land to the U.S. government.

Who Exactly Is on the Hook?

The core of this bill hinges on the definition of a “covered foreign entity.” And this is where things get broad and potentially messy. It clearly targets corporations incorporated in the PRC, including Hong Kong and Macau. But it also sweeps in any person, business, university, or organization that acts on behalf of the Chinese government or is “affiliated with the Chinese Communist Party.” This definition is so wide that it could potentially snag entities with only tangential or historical ties that pose no real national security threat. If you are an American working for a company that might fall under this broad affiliation umbrella, this could directly affect your employer and, by extension, your job.

The Clock Starts Now: Forced Sales and Penalties

If a covered foreign entity currently owns U.S. agricultural land—defined as land used for farming, ranching, or timber production within the last five years—they have 180 days to file a formal intent to sell, and then a hard deadline of one year to complete the divestiture. Miss that deadline, and the Secretary of Agriculture can hit them with a fine of $100 for every acre, every single day they remain in violation. For a 1,000-acre farm, that’s $100,000 a day. If they really ignore the rules, the Attorney General can step in, charge them criminally (up to five years in prison), and seize the land entirely, auctioning it off to the public.

The same urgency applies to residential real estate. If a covered entity owns a home or condo, they have one year to sell it. If they fail to do so, the Secretary of Commerce can fine them $1,000 per property, per day. This intense pressure and the threat of forced sales could lead to significant market disruption for the affected entities, potentially forcing sales at below-market value just to meet the deadline.

A Voided Contract: Non-Compete Agreements

There’s a small but significant provision tucked into the farmland section that affects employees. If a covered foreign entity owns or leases U.S. farmland, any non-compete agreement they have with an employee is immediately null and void. A non-compete is a contract that restricts where you can work after leaving a job. While this might sound like a win for the employee—suddenly they are free to work for a competitor—it does create immediate contractual uncertainty and could complicate talent retention for those entities forced to divest.

What This Means for the Housing Market

For the next two years, the bill aims to remove a segment of foreign buyers from the residential real estate market. The Secretary of Commerce is required to report back to Congress within 540 days on how this two-year purchasing ban has affected the U.S. housing market and affordability. The idea is that restricting foreign investment might cool down prices, particularly in high-demand areas. However, forcing existing owners to sell within one year could also inject a sudden, albeit small, amount of inventory into the market, which might affect local housing dynamics in the short term.