community magazine CAI community magazine December 2017 - Page 9

legal matters Covenant Presevation 101: Homeowners’ Association Directors need to be educated about the potential adverse effects of Florida’s Marketable Record Title Act By Rick Weller, Esq., Najmy Thompson, P.L. If you live in a homeowners association in Florida that is subject to Chapter 720 of the Florida Statutes (the “Homeowners’ Association Act”), you may have heard the term “MRTA” being discussed as the Florida statute that can extinguish your covenants and restric- tions after thirty (30) years, prohibiting your Home- owners’ Association from enforcing any of your deed restrictions, collecting assessments, and from exercising any of the other powers provided by the covenants. MRTA is an acronym for the Marketable Record Title Act, Chapter 712, Florida Statutes. MRTA was enacted by the state legislature in the early 1960s. It does not typically apply to condo- minium declarations, but there could be instances in which MRTA may apply to property owned by a con- dominium association that may be subject to separate covenants. It is a complicated statute that can be diffi- cult to interpret and understand, so if you have any questions about the potential effect of MRTA on the lots in your community, consult with your legal counsel. Without getting into the reasons why the legislature thought it was important to enact MRTA, and without getting into the intricate details about how the statute works to extinguish the covenants as they pertain to one or more lots in your community, it is important for you to be aware of the law and the relatively simple steps that your Board can take to “preserve” or “renew” the covenants, and avoid having to worry about legal and statutory interpretation issues that could affect your community. It is important to note that amendments or restatements of the original covenants do not serve to preserve or renew the covenants. If the original covenants are approaching the 30- year mark, the Association will be faced with “preserv- ing” them for another 30-year period. Thankfully, MRTA allows the board of directors for a Homeowners’ Association to take simple steps to preserve the covenants before they expire. The Board must provide at least seven (7) days’ notice for a board meeting at which the board will vote to preserve the covenants, an d the notice must be mailed or hand-delivered to all the members. The typical forty-eight (48) hours re- quired for posting notice of board meetings is not ap- plicable for this meeting and board vote, and you must WWW.CAIWESTFLORIDA.ORG comply with the seven (7) days’ notice requirement. The approval of two-thirds (2/3) of the Board is necessary to approve of the preservation of the covenants. The notice and other necessary documents must contain specific information, and should be prepared by your legal counsel to make sure they comply with all of MRTA’s requirements. Failing to comply with the statute’s specific requirements could result in unin- tended extinguishment. Also, make sure that the min- utes of the meeting are complete and accurate, and maintained in the official records. Once the approval of two-thirds (2/3) of the board is obtained at the duly noticed board meeting, MRTA then requires a notice of preservation to be executed and recorded in the public records. A board member must also execute and record an affidavit affirming that the board has complied with the statutory requirements. To avoid any issues with the preservation, consult with legal counsel for the preparation of the necessary docu- ments, and to have the entire process completed before the document creating the original covenants reaches its 30-year recording anniversary. If the covenants are more than thirty (30) years old, the Association could be faced with the “revitalization” process provided by Sections 720.403 to 720.407 of Homeowners’ Association Act. The revitalization process for covenants that have already expired as to one or more lots in the community is a topic for another arti- cle. Revitalization is a much more time-consuming and costly process, and it requires the approval of a majority of the owners (not the directors). The best practice is to be aware of the age of your covenants and take action to preserve them BEFORE they expire. While some of the members of your Homeowners’ Association may be pleased that your association could potentially lose its ability to send enforcement or collec- tion letters to them (you know who they are!), most, if not all, of our clients believe that their covenants are vital ingredients to preserving and enhancing their prop- erty values and their sense of community. For younger Homeowners’ Associations, MRTA may not affect the life of your covenants for years, possibly decades, and you may have a long time before you need to do any- thing. But for those older associations that are ap- proaching the 30-year mark, it will be important to act in timely manner, and with guidance from your legal coun- sel from start to finish. community • December 2017 Rick Weller, Esq. Najimy Thompson, P.L. www.najmythompson.com (941) 748-2216 9