Homeowners’ Associations in Florida and the Marketable Record Title Act: Are Your Governing Documents Still Valid?
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Florida homeowner and condominium associations’ governing documents (declaration, bylaws and articles of association) are critical for maintaining order and enforcing rules and regulations. These governing documents are recorded in the public records of the county where the association community resides. The purpose of recording these documents is to provide notice to all interested parties. If these governing documents ceased to exist by operation of law, the association would be in grave danger. Therefore, it is imperative that homeowner and condominium associations take all necessary steps to preserve their governing documents.
Florida homeowner associations must be familiar with the Marketable Record Title Act (“MRTA”) to preserve and protect the ongoing validity of their governing documents. One of the purposes of the MRTA is to extinguish clouds on title that are older than 30 years following the effective date of the root of title (the instrument creating or transferring an estate in real property). The MRTA was enacted to simplify the process of transferring real property. See Southfields of Palm Beach Polo and Country Club Homeowner’s Ass’n, Inc. v. McCullogh. For homeowner associations whose governing documents are approaching that 30-year expiration period, the failure to comply with Florida law will result in the association being unable to enforce its governing documents.
Not to fear, however, Florida law provides a way to ensure homeowner association’s governing documents do not expire or, if they have expired, a way to revive them. See Florida Statutes 712.05 and 720.403, respectively.
For Florida homeowner associations approaching the 30-year expiration date referenced above, Florida Statute §712.05, provides that an association can avoid extinguishment of its current covenants and restrictions by recording, during the 30-year period immediately following the effective date of the root of title, a written notice in accordance with the Florida Statutes. This notice will then have a duration for up to another 30 years. The notice may be recorded by the association’s board of directors only if it is approved by at least two-thirds of the members of the board of directors at a properly noticed meeting.
For homeowner associations that are past the 30-year expiration date referenced above, Florida Statute §720.403 allows the association to revive their covenants and restrictions upon approval by the parcel owners and by the Department of Economic Opportunity.
In order to revive the expired homeowner association governing documents, an organizing committee must be formed and comprised of three or more property owners of the community. This committee must create a full text of the proposed governing documents. The homeowner association, through this committee, can then seek approval from the Department of Economic Opportunity, provided these and other requirements set forth in the statute are satisfied:
- All properties in the community have been governed by the prior declaration.
- A majority of the property owners within the expired homeowner association approve the revised governing documents in writing or at a properly noticed meeting.
- The revived governing documents are not more restrictive than the previous governing documents.
Once the revived declaration and other governing documents are approved by the effective parcel owners, the committee then submits the proposed revised governing document to the Department of Economic Opportunity for review. The Department then has sixty (60) days after receiving the submission to determine whether the proposed revised governing documents comply with the statutory requirements. No later than thirty (30) days after receiving that approval, the association committee referenced above files the articles of incorporation with the Division of Corporations (if they have not been previously filed), and the president and secretary of the association execute the revived declaration and other governing documents and have them recorded with the Clerk of the Circuit Court.
Since it is critical that homeowners’ associations maintain the applicability and enforceability of their governing documents, these associations should consult with counsel to ensure their governing documents do not expire or, if they have, take all necessary steps to revive them.