by NALC staff
On April 28, 2025, West Virginia Governor Patrick Morrisey signed into law House Bill 2961 (“HB 2961”) which restricts certain foreign purchases of real property located within the state. West Virginia’s state code does contain a restriction on certain foreign purchases of land located within the state, but the prohibition only extends to purchasing real property at a public auction held by the West Virginia State Auditor’s Office. See W. Va. Code Ann. § 11A-3-45a. However, under HB 2961, certain foreign individuals, entities, and governments are prohibited from acquiring an interest in agricultural land located within West Virginia, whether through a public auction or a private sale. With the enactment of this legislation, West Virginia is now one of twenty-seven states to enact a foreign ownership law, and the fifteenth state in the past two years to enact a restriction on foreign investments in land. This law goes into effect July 10, 2025.
Essentially, HB 2961 restricts any “prohibited foreign-party-controlled business” (“PFPCB”) from acquiring or owning, directly or indirectly, any interest in real property, including mineral rights, located within the boundaries of the state. Most states’ foreign ownership laws restrict certain foreign investments in agricultural land or land surrounding critical infrastructure and military installations, but HB 2961 restricts PFPCBs from acquiring any interest in all real property located within the state. Furthermore, agents, trustees, or fiduciaries may not hold an interest in West Virginia real property on behalf of a PFPCB.
Like any piece of legislation, the definitions contained in HB 2961 are important because they provide context to how the words or phrases are to be understood throughout the legislative text. This legislation defines PFPCB as any type of business entity or legal entity in which a controlling interest (50% or more, in the aggregate) is owned or operated by a prohibited foreign party (“PFP”).
Under the law, a “PFP” is the government of the People’s Republic of China and its citizens. Thus, business entities, including U.S. entities, which contain a majority ownership interest held by the Chinese government or a Chinese citizen are a PFPCB and restricted from acquiring real property located within the state.
The definition of PFP also includes foreign governments, entities, and individuals identified as hostile to the interests of the U.S., as determined by West Virginia state officials—including the Governor, Treasurer, Agriculture Commissioner, Auditor, Attorney General, and Secretary of State—in consultation with West Virginia Secretary of Homeland Security. In other words, these West Virginia state officials have the authority to designate certain governmental and non-governmental actors from acquiring or investing in West Virginia real property through a business entity in which they have a controlling interest. This type of procedure that permits state officials to designate specific foreign persons as prohibited investors in real property located within its state is unique to West Virginia’s law as no other states’ foreign ownership law contains such a provision.
Although the law restricts PFPCBs from acquiring an interest in West Virginia real property and mineral rights, legal resident aliens of the U.S. are not subject to the restriction, meaning they can acquire, hold, and transfer real property in the same manner as citizens of the U.S.
Unlike almost all states’ foreign ownership laws, HB 2961 applies retroactively. Specifically, this law requires PFPCBs holding land on the effective date of this measure to sell, transfer, or otherwise divest their interest in the property by January 10, 2026. Failure to comply with this divestment requirement allows the West Virginia Attorney General to initiate a civil action against the entity or individual in violation of the law. If a court determines a violation has occurred, the court is required to order the real property be sold through a public auction.
Further, this legislation includes a provision to protect individuals and entities that unknowingly engage in transactions with PFPCBs. Thus, sellers and tenants are not liable for failing to identify PFPCB purchasers of land. Also, title to real property remains valid even if the land was previously held in violation of the restriction. In other words, a buyer of land held in violation by a PFPCB can still obtain clear title to land, which means their ownership is valid and free from significant defects or claims that could challenge their right to possess or transfer the property.
Conclusion
HB 2961 marks a significant shift in West Virginia’s approach to restricting certain foreign investments in real property located within the state. In fact, with the enactment of this legislation, West Virginia joins a growing number of states enacting legislation to limit foreign investments in real property located within its state and is now the twenty-seventh state to enact such legislation. Despite the growing number of states enacting similar laws, enforcement actions under foreign land ownership restrictions have so far been minimal. Accordingly, whether West Virginia will bring enforcement actions on violations of the law will likely depend on how the state prioritizes implementation and monitors compliance in the months following the law’s July 10, 2025, effective date.
To read HB 2961, click here.
To read NALC articles discussing foreign investments in U.S. agriculture, click here.
To learn more about foreign ownership of U.S. land, click here.
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