In the case of Southfields of Palm Beach Polo and Country Club Homeowners Association., et al, vs. McCullough, Case Nos. 4D11-1130 and 4D11-4659 (April 17, 2013), the Fourth District Court of Appeal has clarified the obligation of the members of the board of directors in a homeowner association to take affirmative action to make certain that the governing documents of the community do not expire under the Marketable Record Titles to Real Property Act (“MRTA”) set forth in Chapter 712 of Florida Statutes. In its decision, the Court affirmed the decision of the lower court that when faced with the expiration of the Covenants under MRTA, a board of directors must take the required action to make certain such expiration does not occur.
The court noted that MRTA was enacted in 1963 to simplify and facilitate land transactions by providing that unless properly preserved under the procedures set forth in the Statute, claims against property, which includes declarations of covenants, will expire after thirty (30) years. Within the Statute is a procedure for preserving the covenants for another thirty (30) year period, which includes filing certain notices in the Public Records. In the Southfields case, the board was refusing take the necessary action to comply with the Statute and, as such, risking the expiration of the covenants. If the covenants expired, the association would no longer be able to enforce the restrictions or collect assessments. The court confirmed that when the governing documents generally mandate the board of directors to protect the community, which most governing documents will do, the board of directors must fulfill its duty and take the required action to preserve the declaration. The failure of the board to do so with such knowledge of the duty could involve exposure to personal liability for the individual directors.
MRTA does not affect condominium associations. However, for any homeowner association community with an original declaration of covenants that was recorded less than, but close to thirty years ago, the board should consult with the association attorney as soon as possible regarding the preservation of the covenants before the thirty year expiration, as the procedures after the expiration are much more difficult to accomplish.
