HOMEOWNERS ASSOCIATIONS NEED TO BE AWARE OF THE MARKETABLE RECORD TITLE ACT (“MRTA”)

By: Jay Steven Levine, Esquire, Levine Law Group

Homeowners who purchase property in homeowners associations are usually aware that there are covenants and restrictions which provide for architectural control, insurance, maintenance obligations and use restrictions and other important matters. Assessments are collected from each homeowner in order to fund the expenses of Homeowners Associations. However, if an Association’s covenants and restrictions, such as the Declaration, By-laws, and Articles of Incorporation are deemed unenforceable because they expired due to The Marketable Record Title Act (“MRTA”), a nightmare scenario could overcome the Association. Owners may stop paying their assessments and the community could turn into a disaster, as the Association may not be able to enforce its covenants and restrictions.

The Marketable Record Title Act (“MRTA”), Florida Statute Chapter 712, applies. If the covenants and restrictions for the community have been recorded less than thirty (30) years ago, and the Association is approaching year thirty (30), the statute provides for a method to preserve the covenants and restrictions, known as a preservation. This process is accomplished through a vote of the Board of Directors alone.

The problem arises when the covenants and restrictions have been recorded more than thirty (30) years ago. The statute requires a lot-by-lot analysis to determine which lots may no longer be bound by the covenants and restrictions. The analysis is as follows: A title search would be performed for each lot. We would look back more than thirty (30) years from the current date to locate the first “root of title” for the lot in question which is older than 30 years. The “root of title” is typically a deed. If no deed in the chain of title beginning with the “root of title” mentions the restrictions and covenants specifically by name, then that particular lot is no longer bound by the covenants and restrictions. If instead at least one (1) deed beginning with the “root of title” mentions the covenants and restrictions by specific name, then that lot remains bound to the covenants and restrictions. If it is determined by this lot-by-lot analysis that every lot is still bound to the covenants and restrictions, even though they are older than thirty (30) years, then the Association would be eligible to preserve the covenants and restrictions. If any one lot is no longer bound, then the only way to revive the covenants is through a process known as revitalization. The difference between a preservation and a revitalization is that a preservation may be accomplished by the vote of the Board of Directors alone, whereas a revitalization requires membership approval. The cost to perform a revitalization is considerably more than the cost of a preservation. For this reason, it is important for Associations to know when the thirty (30) year mark occurs so that a preservation is accomplished before then.

It is our opinion that the Board of Directors of the Association has a fiduciary duty to the members to insure that covenants and restrictions do not expire.

Given the complexity of MRTA, if your Association’s covenants and restrictions are nearing 30 years old, or has passed this timeframe, it is highly recommended that the Board of Directors contact Association counsel for legal review and guidance going forward.

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The information contained in this Publication is intended to provide general information and is not regarded as rendering specific advice to your particular Community Association. While we make every attempt to ensure that the information contained herein is accurate and complete, the Levine Law Group is not responsible for any omissions, or for the results obtained from the use of this information.  Furthermore, we are not responsible for the applicability of any such information to your particular situation. The information in this Publication does not constitute legal advice and is not intended to be a substitute for legal counsel. You are urged to contact your Association’s attorney should you have questions on the applicability of this Publication to your Association. Please be aware that the legal principles as referred to in this Publication are subject to change from time to time.

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