REVITALIZATION OF DOCUMENTS THAT HAVE EXPIRED DUE TO
THE MARKETABLE RECORDS TITLE ACT
In The Association e-Lawyer, Volume II, Issue 4, we addressed the fact that the Marketable Records Title Act (MRTA) will invalidate Covenants and Restrictions which govern homeowner communities unless steps are taken by Associations before the documents exceed the 30-year life span provided for in MRTA. Unfortunately, some communities fail to act timely and find that their Covenants and Restrictions are no longer valid. Fortunately, in 2004, the Florida legislature adopted a law which allows many of those communities to revitalize their Covenants and Restrictions. This e-Lawyer will discuss that revitalization process.
STATUTORY PROCEDURE TO REVITALIZE GOVERNING DOCUMENTS WHICH HAVE BECOME VOID AS A RESULT OF MRTA:
Effective October 1, 2004, the legislature adopted the following procedures found in Sections 720.403-720.407, Florida Statutes. While the process in this statute is lengthy, it is simpler than obtaining 100% approval from all the Homeowners, which was the requirement prior to the effective date of this statute. The following is a summary of the statutory procedure:
1. The proposal to revive the Covenants and Restrictions must be initiated by an organizing committee consisting of not less than three (3) parcel owners located in your community. The name, address and telephone number of each member of the organizing committee must be included in any notice or other document provided by the committee to parcel owners affected by the proposed revived Covenants and Restrictions;
2. The organizing committee shall prepare or cause to be prepared a complete text of the proposed revised Covenants and Restrictions and the existing Articles and Bylaws to be submitted to the parcel owners for approval. This procedure merely requires obtaining copies of the currently recorded Covenants and Restrictions, any recorded amendments or supplements to the Covenants and Restrictions, the Articles of Incorporation and its amendments, and the Bylaws and its amendments (the revived Governing Documents);
3. The revived Governing Documents must identify each parcel that is to be subject to the Governing Documents by its legal description and the name of the parcel owner;
4. A copy of the complete text of the Covenants and Restrictions, its amendments and supplements, and existing Articles and Bylaws of the Association and their amendments, and a graphic depiction of the community, which can be the plat, must be presented to all of the affected parcel owners by mail or hand delivery not less than 14 days before the time that the consent of the affected parcel owners is sought;
5. A majority of the affected parcel owners must agree in writing or by a vote at a meeting of the affected parcel owners, which is properly noticed, to the revived Governing Documents. Proof of notice of the meeting and the minutes of the meeting recording the votes of the property owners shall be certified by a court reporter or an attorney licensed to practice in the state. (We have found obtaining written consents to be the better procedure);
6. A current or former officer of the Association or a Member of the organizing committee must prepare an affidavit verifying that the requirements for the revived Governing Documents set forth in Section 720.404, Florida Statutes, have been satisfied;
7. No later than 60 days after the proposed revived Governing Documents are approved by the affected parcel owners, the organizing committee or its designee must submit the proposed revived Governing Documents and supporting material to the State of Florida Department of Community Affairs to review and approve or disapprove;
8. No later than 30 days after receiving approval from the Department, the organizing committee shall file the Articles of Incorporation with the Division of Corporations of the Department of State, if the Articles have not been previously filed;
9. No later than 30 days after receiving approval from the Division, the President and Secretary of the Association shall execute the revived Governing Documents and have the same recorded. The letter of approval by the Department and the legal description of each affected parcel of property must also be recorded with the revived Governing Documents; and
10. Immediately after recording the documents, a complete copy of all of the approved recorded documents must be mailed or hand delivered to the owner of each affected parcel.
THE RAMIFICATIONS OF THE FAILURE TO REVITALIZE:
The ramifications of allowing Covenants and Restrictions to expire and then failing to revitalize the same are grave. First and foremost, the Association cannot lien property and collect payments from Owners who are failing or refusing to pay assessments. While the Association still remains a corporate entity, it becomes a voluntary homeowners association. Therefore, the Association would be relying on the willingness of Owners within the community to pay an association fee in order for the Association to continue to operate the common areas.
Second, while the Association would still be responsible for the common areas, it may not have the money to pay for maintaining, repairing and replacing the same. If it does not have the money to maintain, repair and replace the same, it may be breaching its obligations to the water management district or another governmental entity, not to mention its obligations to the Owners. Further, with a lack of money, the Association may be put in a financial bind and need to sell the common areas or transfer them to the local government, if that is even possible.
Third, if the Covenants and Restrictions have expired, the Association no longer has Architectural Control, if the Association had such power under its Covenants and Restrictions. Further, the Association cannot enforce the rules set forth in the Covenants and Restrictions, which means provisions governing parking, signs, pets, etc., would not be enforceable by the Association.
Therefore, if your Covenants and Restrictions have expired, the Association must make immediate attempts to revitalize them.
The firm of Taylor & Carls, P.A., with offices located in Maitland, Clearwater and Palm Coast, Florida, was founded in 1981 and has practiced in the area of community association law since that date. This edition was prepared by Elizabeth A. Lanham-Patrie, Esq. of Taylor & Carls, P.A. The information contained in The Association e-Lawyer should not be acted upon without professional legal advice. The opinions expressed herein are as of the date hereof, and this law firm undertakes no obligation to advise the Association of subsequent changes in the law.