799. Is a person subject to U.S. jurisdiction allowed to purchase or lease real property in Cuba?
Generally no, a person subject to U.S. jurisdiction is not authorized to purchase or lease real property in Cuba. The CACR prohibit any person subject to U.S. jurisdiction from purchasing or leasing property in Cuba unless authorized by OFAC.
Section 515.573 of the CACR authorizes certain entities subject to U.S. jurisdiction to establish a physical and/or business presence in Cuba to conduct authorized activities. The purchase or lease of real property in Cuba by such entities incident to their establishment of such physical or business presence is authorized. Additionally, employees of such entities authorized by § 515.573(a)(4) of the CACR to establish domicile in Cuba may purchase or lease residential property for use while domiciled in Cuba. For a complete description of what this general license authorizes and the restrictions that apply, see 31 CFR § 515.573.
Authorized travelers to Cuba may lease property in Cuba as accommodations for the duration of their stay in Cuba. See 31 CFR § 515.560(c). This authorization is limited to the period of time when the traveler is in Cuba for authorized travel and does not permit the traveler to retain the property upon departure from Cuba.
Transactions related to the purchase or lease of real property in Cuba remain subject to the prohibitions in 31 CFR § 515.208. [11-08-2017]
1) Without any other text addressing the question, permission to purchase real property appears to be an extremely generous interpretation of, especially in the case of individual employees, authorization "to engage in all transactions necessary to establish domicile in Cuba." Query whether this has cross-programmatic implications.
2) It is unclear what happens if a U.S. person entity owns property in Cuba but subsequently winds up the business, or if the employee of an entity owns property and is subsequently terminated or changes employers. Must there be a sale of the property (even at a substantial loss) prior to exiting the island? Whether some degree of maintenance of the property post-exit is considered “incident” to the initial establishment of the physical presence to begin with is an interpretive question for which there is little guidance, but the answer should have a major impact on decisions of whether to buy or lease when a physical presence is generally licensed.