Foreigners May Dump U.S. Property

July 12, 2002

INS Rule Would Cut Stays To 'Fair And Reasonable' Amount Of Time

By Bridget McCrea
Inman News Features

A new set of rules being formulated by the Immigration and Naturalization Service could make U.S. real estate a tough sell to foreign nationals.

The INS' latest proposals would add more requirements for certain non-immigrant visitor visa holders who wish to become students and replace the current minimum six-month admission period for B-2 pleasure visitors with "a period of time that is fair and reasonable for the completion of the purpose of the visit," among other changes.

Should the proposals be enacted, B-visa holders applying for entry to the United States would be required to explain the nature and purpose of their visit to an INS immigration inspector, who then would determine the "appropriate" length of stay for that person.

INS inspectors would make every effort to determine a fair and reasonable time period, according to the proposal, but the burden of proof would rest with the individual. If the "appropriate" amount of time needed to accomplish the purpose of the visit couldn't be determined, the INS would grant a 30-day period of admission to the country.

The proposals also would limit the conditions under which a B-visa visitor could obtain an extension of stay and would halve the maximum extension period that could be granted from one year to six months.

The National Association of Realtors is opposing the proposal. NAR 2002 President Martin Edwards Jr. earlier this year sent a letter to the INS stating that the proposal would hurt the significant number of Realtors who represent foreign clients purchasing or leasing property in the United States.

"Any changes to the current rules are of great concern to our members, whose customers require a certain level of certainty that they will have access to their property," Edwards wrote.

The effects of proposals could be harsh for some real estate practitioners, including those who sell homes to the foreign parents of living-abroad college students and foreign nationals seeking U.S. vacation homes.

Edwards in his letter to the INS acknowledged the need for increased national security, but expressed concern about the INS' approach to the issue. He said the proposal does "very little" to increase homeland security, but could be "devastating" to the economy.

Edwards said foreign property owners already are expressing concern to real estate practitioners about the future use of property they already own and some have hinted they may sell their U.S. homes and buy property elsewhere.

"Investors in the rental market also share doubts about the future for their business if there is a decline in foreign tourists due to this proposal," Edwards wrote. He added that local businesses that depend on tourist trade also would suffer if foreign property owners sold their U.S. homes.

"This proposal will remove any incentive for a foreigner to purchase or to rent property in the U.S.," he said.

Edwards cited a study that analyzed the economic impact of German property owners in Southwest Florida. The study found that segment of the population contributed $115 million in local spending and paid $9 million in annual property taxes.

Foreign visitors spent $337 million in New York City alone in 2000, Edwards noted.

The letter urged the INS to clarify that owning a home in the United States would meet a proposed test for the maximum length of stay of six months and be one of the conditions for granting an extension.

Edwards said any new rule should state clearly what information foreign national homeowners would be required to present to qualify for the longest admission period and provide specific guidance to INS adjudicators at points of entry to ensure fair and consistent application of the admission requirements.

NAR Managing Director of Regulatory and Industry Relations Jeanne Delgado said the INS has received 10,000 letters and comments in response to the proposed rule changes. She said the INS will review the comment letters before taking any further action and given the large volume of letters it could be several months before any formal action is taken.

"(The INS commissioner) has made a public statement that he is willing to meet with industry groups on this issue, and we have indicated to the INS our interest in participating in those meetings," Delgado said. "So far, we have no information as to when this (meeting) will occur."

Copyright: Inman News Service

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