Under current Florida law, there is a trap that can result in the expiration of the covenants for the community. Under the Marketable Record Title Act, Chapter 712 of Florida Statutes (“MRTA”), residential homeowners’ associations are required to preserve the integrity of the declaration (of covenants and restrictions) for the entire community to retain the status of the declaration as the source of marketable title with regard to the transfer of a member’s residence. Florida law requires that this process be undertaken at least once every thirty (30) years. The failure to take such action prior to the expiration of the thirty (30) year time will result in the expiration of the covenants, which can then be reinstated only with a vote of the homeowners. (These issues do not apply to condominiums.)
While MRTA is relatively complicated, in simple terms, the key date to be aware of is the date the declaration of covenants is recorded in the public records of the county where the property is located. In order to ensure that the integrity of the declaration is retained, which allows the board to continue to strictly and uniformly enforce all provisions therein, including the collection of assessments, it is necessary to take the required steps to preserve the declaration within thirty (30) years of the date of its original recording.
If undertaken before the expiration, the board must hold a properly noticed board meeting, which notice references that the purpose of the meeting is to “address the Statement of Marketable Title Action”. Written notice of the meeting must be provided to all owners at least seven (7) days in advance of the meeting date and at the meeting, at least two-thirds (2/3) of the members of the board must vote to approve the recording of the Statement of Marketable Title Action, which will then serve to retain the status of the declaration as the source of marketable title, and renew it for another thirty (30) year period from the date that Statement is recorded in the public records.
It is also important to be aware that even if the residential homeowners’ association community amended its declaration in part, or completely, during the thirty (30) years following the initial recording, this will NOT extend the “life” of the declaration and the act to preserve the declaration should still be undertaken within thirty (30) years of the date of the original recording of the declaration.
Should the thirty (30) years pass without the proper preservation process being undertaken and recorded, the association risks the likelihood of the declaration has expired. Should that occur, there is a process available under Chapter 720 of Florida Statutes to reinstate the declaration. This process is much more involved and costly to the community, and requires a vote of the homeowners in order to reinstate the declaration, and an approval of the documents by the Florida Department of Financial Affairs in Tallahassee. As such, since there is a simple way to avoid it through renewal preservation, all residential homeowner association board members are urged to take immediate action to address this issue, or at least to determine how close they are to the thirty (30) year expiration period. It is suggested that the renewal process for the declaration take place well in advance of the expiration date.
The Firm of Kaye Bender Rembaum has assisted many residential homeowners’ associations with this preservation process, and are available to assist any residential homeowners’ association with the preparation of all proper documentation needed to ensure that this process is properly and timely undertaken, or, in the event that the declaration has already expired, to assist with the process of reinstatement.