New Laws to Preserve and Revive HOA Covenants
The 2018 legislative session resulted in changes to Florida Statutes, Chapters 720 and 712, dealing with the preservation and revitalization of community covenants and restrictions and the Marketable Record Title Act (“MRTA”), and the addition of a new requirement for homeowner association boards to address MRTA on an annual basis. The amendments to the MRTA Statute (F.S. Chapter 712) become effective October 1, 2018. Chapter 720 amendments go into effect July 1, 2017.
The purpose of MRTA is to extinguish ‘stale’ restrictions on real property; those that are more than 30 years old, measured from the ‘root of title’ (a recorded instrument creating or transferring estate in real property). If a ‘muniment of title’ (usually a deed) specifically refers to the book and page number where the restriction is recorded in the public records, the restriction for that parcel is not extinguished under MRTA. For the unwary homeowner’s association, MRTA may have the effect of extinguishing the covenants and restrictions for lots in the subdivision, and thereby the association’s ability to enforce the restrictions, because many deeds to single-family homes/lots contain only a general reference to covenants and restrictions of record, and therefore don’t qualify for an exception to extinguishment. Condominium declarations, on the other hand, generally aren’t susceptible to MRTA extinguishment because the Condominium Act requires that the legal description for deeds to individual units include specific reference to the public record information for the declaration of condominium.
The good news for HOAs approaching 30 years from the recording of the original declaration of covenants is that there is a process, which has been simplified by the 2018 amendments to Chapter 712, whereby the board of directors of an HOA can preserve the covenants for an additional 30 years by filing a summary notice of preservation in the public records of the county where the subdivision is located. The covenants may also be preserved by an amendment to the covenants and restrictions that is indexed under the legal name of the property owners’ association, references the legal name of the property owners’ association and references the recording information of the covenant or restriction to be preserved. For homeowner association covenants which are past 30 years from the root of title, there is a revitalization process, although it requires an owner vote.
New Requirement for all HOA boards under §720.303(2)(2), “At the first board meeting, excluding the organizational meeting, which follows the annual meeting of the members, the board shall consider the desirability of filing notices to preserve the covenants or restrictions affecting the community or association from extinguishment under the Marketable Record Title Act, chapter 712, and authorize and direct the appropriate officer to file [notice of preservation].” Thus, strict compliance with the new statute would require that your board consider annually the impact of MRTA, even if the 30-year deadline is years away and regardless of whether a preservation notice has already been filed. The minutes of those meetings should reflect a discussion of the relevant dates and events relating to MRTA.
There were additional changes including a granting of authority for communities not governed by a homeowners’ association to now revive covenants and restrictions, and an expansion of the definition of ‘parcel’ to include those used for non-residential purposes. Understanding MRTA extinguishment and the processes to preserve and revitalize can be challenging, so consult with association counsel if there is any question about the status of your restrictive covenants. Being aware of the statute and its implications, however, is the first critical step.* —Attorney Leslie D. Sheekley
*The information in this blog post is provided for general informational purposes only, and may not reflect current law in your jurisdiction. No information contained in this post should be construed as legal advice from Hand Arendall Harrison Sale LLC or the individual author, nor does it constitute legal counsel or solicitation of a prospective client. An attorney-client relationship with the Firm cannot be formed by reading or relying on this information; such a relationship may be formed only by a specific and explicit agreement with Hand Arendall Harrison Sale LLC.