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Subject: reafirming hoa
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RogerC
(Florida)

Posts:1


09/07/2017 5:01 PM  
We were told the Hoa has a life span of 30 years and that we may have to reaffirm the hoa.
Is this true? If so what do we have to do.

RogerC
TimB4
(Virginia)

Posts:14509


09/07/2017 6:23 PM  
You are talking about MRTA.

See FL 712 MARKETABLE RECORD TITLES TO REAL PROPERTY

and FL 720.403 to 720.407 COVENANT REVITALIZATION
DaveD3
(Michigan)

Posts:726


09/07/2017 6:47 PM  
For what reasons would you reaffirm the HOA?
DouglasK1
(Florida)

Posts:839


09/07/2017 7:37 PM  
Posted By DaveD3 on 09/07/2017 6:47 PM
For what reasons would you reaffirm the HOA?


Because of the Florida law Tim quoted. As long as you are within 30 years and the covenants have not yet expired, you can "preserve" them with a simple action of the board. If you are past the 30 years and the covenants have expired, you need to revitalize, which is a much more involved process.

There are several long threads here about this, examples:
http://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/149433/view/topic/Default.aspx

http://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/131864/view/topic/Default.aspx

http://www.hoatalk.com/Forum/tabid/55/forumid/1/tpage/1/view/Topic/postid/136543/Default.aspx
DaveD3
(Michigan)

Posts:726


09/08/2017 3:51 AM  
Posted By DouglasK1 on 09/07/2017 7:37 PM
Posted By DaveD3 on 09/07/2017 6:47 PM
For what reasons would you reaffirm the HOA?


Because of the Florida law Tim quoted. As long as you are within 30 years and the covenants have not yet expired, you can "preserve" them with a simple action of the board. If you are past the 30 years and the covenants have expired, you need to revitalize, which is a much more involved process.

There are several long threads here about this, examples:
http://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/149433/view/topic/Default.aspx

http://www.hoatalk.com/Forum/tabid/55/forumid/1/postid/131864/view/topic/Default.aspx

http://www.hoatalk.com/Forum/tabid/55/forumid/1/tpage/1/view/Topic/postid/136543/Default.aspx





I understand that they expire.

My question wasn't a matter of NOW vs LATER, it was one of renewing them at all. Rather than take the approach that this is something that is mandatory, why not assess the pros and cons of doing so? i.e. is the HOA of overall benefit to the neighborhood?
TimB4
(Virginia)

Posts:14509


09/08/2017 6:27 AM  
Dave,

If there are common amenities, common area or private roads then the covenants need to be renewed or those things will end up not being taken care of because the funding won't be there.
DaveD3
(Michigan)

Posts:726


09/09/2017 7:42 PM  
Posted By TimB4 on 09/08/2017 6:27 AM
Dave,

If there are common amenities, common area or private roads then the covenants need to be renewed or those things will end up not being taken care of because the funding won't be there.



Right Tim. Which suggests that the HOA shouldn't be renewed blindly. The members should ask the questions of IF and WHY, and understand the benefits and risks of renewing or not.
GwenG
(Florida)

Posts:488


09/09/2017 7:55 PM  
There ARE alternatives to internal funding of HOA's through assessments, such as Special Tax Districts and other units of government.

There are many HOA's across the country who are exploring these possibilities due to the failure of HOA's to meet the public works needs of residents e.g. dams, drainage, bridges etc. Homeowners are becoming aware that such necessities are not "amenities" and that they pay county taxes for this infrastructure but do not receive the benefits because it is part of their "common property".

MRTA is not just a Florida law; nineteen (19) states have MRTA laws that are very similar to Florida.
GenoS
(Florida)

Posts:1446


09/14/2017 12:23 PM  
Posted By DaveD3 on 09/09/2017 7:42 PM
Right Tim. Which suggests that the HOA shouldn't be renewed blindly. The members should ask the questions of IF and WHY, and understand the benefits and risks of renewing or not.

If 100% of the owners agree then another arrangement can be hammered out. There are perpetual maintenance obligations in many places that cannot simply be dropped. If 100% do not agree then the show must go on. Boards have been sued in Florida for failing to timely file MRTA preservation documents.
GwenG
(Florida)

Posts:488


09/14/2017 1:12 PM  
Geno: I am aware that many have opined- including attorneys- that Boards that fail to timely file Preservation of Covenants SHOULD be sued, but have never heard of any case that has actually been filed. Could you tell me of such a case?

Failure of my HOA to file a valid Preservation AT ALL, much less in a timely fashion, will end up costing owners hundreds of thousands of dollars in legal and administrative fees before all is said and done. The tally is not in yet, because there is still a legal appeal pending challenging the authority of Florida to revitalize the association. If the appeal is upheld, the HOA will cease to exist forever and it is unknown what the long term fallout will be, but it will probably be as costly as the uphill process. I would like to know if you know a case that has been filed on the basis of failing to file Preservation.

There ARE alternatives to preserving an HOA but it involves resetting the management of facilities to another governmental unit and forming special tax/improvement districts. Hitting the Reset Button also requires a period of uncomfortable transition and is made more difficult when distrust has been bred within a history of board secrecy and incompetence. There are communities in other states considering the move to governmental units, some of whom are lobbied by "experts" hired to create disinformation and engage in fear-mongering to try to steer owners back into another corporate-management model. This lack of transparency and honesty is further eroding trust in leadership and making the transition much more difficult.

Transferring infrastructure to a governmental tax unit is done routinely under pre-determined development plans but is not done as much as a reaction to the liquidation of HOA-managed infrastructure. But it can be, has been and probably will be done with much greater frequency in the future as discontent with association-managed communities continue their freefall into disfavor with younger consumers.
GenoS
(Florida)

Posts:1446


09/14/2017 1:32 PM  
I had this page bookmarked, Gwen:

"The Fourth District Court of Appeals (4th DCA) upheld the trial court’s decision and clarified the obligation of HOA boards to take planned and specific action to ensure that the governing restrictive covenants doe not expire under MRTA."

It is the only case I know of.
GwenG
(Florida)

Posts:488


09/14/2017 1:46 PM  
Aaahh..thanks for reminding me about this 2013 case. I did recall reading it and just now re-read the case.

In the case, the Board refused to file a Preservation and which would have eventually expired covenants on the properties. The lawsuit was to COMPEL the Board to file the Preservation rather than suing it for "failing to file". The Appeals Court agreed with the trial court's order to compel the corporation to act and to stop refusing to file the Preservation. This was a lawsuit for injunctive relief rather than damages for failure to act.

Thanks for clarifying the case you referred to.
GenoS
(Florida)

Posts:1446


09/14/2017 1:54 PM  
Another future thing they keep talking about is carving out an exception in the MRTA law to exempt HOAs (and probably condos, co-ops, etc.) from having their covenants and deed restrictions extingushed by MRTA. But that hasn't happened yet and even if it does happen in the near future, It might not take effect retroactively.
GwenG
(Florida)

Posts:488


09/14/2017 3:29 PM  
Legislature has been trying to get these MRTA-quashing bills through for the last two sessions. I heard there was tremendous pushback from title industry. The 2002 legislation provided a way for HOA's to preserve their Covenants and it appears that the intent is to make HOA's subject to MRTA. Last year's bill was a head scratcher and watered down the draconian effect by loading administration burden on associations. This seems to be the direction and indicate reluctance to exempt HOA's from MRTA. We shall see.

Coop's and condos are not subject to MRTA. (However, their Master HOA is if they have one.)

Legislature will have bigger fish to fry next year than trying to make MRTA go away. Legislators have promised a mirror bill to this year's comprehensive condo bill for HOA's. HOA's have always been second class to condo law but now the inequity is dramatic and unsustainable. Most condos also have Master HOA's attached... Now, condo associations with a master HOA associations have two VERY DIFFERENT statutes! Makes my head spin trying to keep them separate!
JanetB2
(Colorado)

Posts:3355


09/14/2017 10:07 PM  
Posted By RogerC on 09/07/2017 5:01 PM
We were told the Hoa has a life span of 30 years and that we may have to reaffirm the hoa.
Is this true? If so what do we have to do.

RogerC


Roger ... You need to reaffirm most especially if you have many "Common Areas" which need to be paid for to maintain. If you do not reaffirm you would end up needing virtually all owners to agree down the road ... which is virtually impossible to obtain. If you have any common areas you want to avoid that scenario!!! IF you have Common Area property to maintain you will want the HOA to make this decision ahead of time. Potentially in this scenario you could have Common Area property with NO MONEY to maintain ... because you no longer have a contract requiring owners to pay for assessments.

If your HOA has ZERO common area property where assessments are being used to maintain ... then you and your neighbors can get together to determine if you would want to renew or not. You would have a lot more freedom of choice, if there is no common area property.
DaveD3
(Michigan)

Posts:726


09/15/2017 7:43 AM  
Posted By GwenG on 09/14/2017 1:46 PM
Aaahh..thanks for reminding me about this 2013 case. I did recall reading it and just now re-read the case.

In the case, the Board refused to file a Preservation and which would have eventually expired covenants on the properties. The lawsuit was to COMPEL the Board to file the Preservation rather than suing it for "failing to file". The Appeals Court agreed with the trial court's order to compel the corporation to act and to stop refusing to file the Preservation. This was a lawsuit for injunctive relief rather than damages for failure to act.

Thanks for clarifying the case you referred to.




That is idiocy defined.
The HOA expires at time X
It is illegal to not file to extend the HOA

Then there's no point of them expiring in the first place.
TimB4
(Virginia)

Posts:14509


09/15/2017 7:59 AM  
Posted By DaveD3 on 09/15/2017 7:43 AM

Then there's no point of them expiring in the first place.




Unintended consequences of the wording of the law.

Apparently, nobody wants (or can get support) to simply change the wording of the law.
GwenG
(Florida)

Posts:488


09/15/2017 8:55 AM  
Florida, along with 18 other states, has a version of MRTA law expiring old covenants. There is a legitimate reason to do this and many states agree.

"The Florida Marketable Record Title Act (“MRTA”), enacted by the Florida Legislature in 1963, was intended to clear up old title defects on property by creating a mechanism for extinguishing title interests of record that were more than 30 years old and were not specifically reserved."

This acts like a "reset button" and enables the smooth transition of title searches to facilitate unimpeded land transactions which had been hindered by the necessity of tracing titles back to Spanish land grants. The casual summary of intent is that "the dead should not control the living". The law allows covenants to be preserved but it is an affirmative act. If HOA's do not file a Preservation, they expire for lack of interest. The Corporate HOA is unaffected to the extent that it operates under corporate laws of the state but is gutted in many ways due to the "death" of the document of its underlying authority--the Covenants.

The case previously referenced was about enforcing board directors to do their fiduciary duty. It can be reasonably argued that maintaining the "life" of an HOA can have the effect of protecting the common property. It can also be reasonably argued that the HOA was created in a different framework by a Developer long gone and the 30 year mark should be a time of re-visiting the need for an HOA and the current owners' desire to be bound by 30 year old land restrictions and do things differently. Owners can transfer common properties to governmental units and pay tax instead of assessments for those services. Or they can recreate a new, light-footprint voluntary improvement group for certain amenities.

Owners should be accurately informed that there are choices with an upside and downside no matter which direction is taken.
GenoS
(Florida)

Posts:1446


09/15/2017 1:06 PM  
There's another MRTA provision in Florida that works to preclude the expiration of covenants. If the plat references the CCRs on its face by official Book and Page number, then those CCRs will never be extinguished. That's the case in my HOA. Every deed (and I have seen them all) referenced the Plat on file with the county. The Plat calls out, by official records book & page number, our Declaration of Covenants (CCRs). MRTA will never extinguish our covenants, according to the MRTA law itself.

That didn't stop our association attorneys from using scare tactics in 2011 to drum up some business for themselves. We went through the MRTA preservation process a few years before the 30-year cutoff date rolled around and paid the attorneys sevreal thousand dollars for the privilege.
JanetB2
(Colorado)

Posts:3355


09/16/2017 8:49 PM  
Posted By GenoS on 09/15/2017 1:06 PM
There's another MRTA provision in Florida that works to preclude the expiration of covenants. If the plat references the CCRs on its face by official Book and Page number, then those CCRs will never be extinguished. That's the case in my HOA. Every deed (and I have seen them all) referenced the Plat on file with the county. The Plat calls out, by official records book & page number, our Declaration of Covenants (CCRs). MRTA will never extinguish our covenants, according to the MRTA law itself.

That didn't stop our association attorneys from using scare tactics in 2011 to drum up some business for themselves. We went through the MRTA preservation process a few years before the 30-year cutoff date rolled around and paid the attorneys sevreal thousand dollars for the privilege.


Yep ... Sometime attorneys will outright LIE (because they tend to represent a certain sector such as maybe developers) or in some instances they are unbelieveably STUPID! We ran acrosss this in my last HOA where many attorneys tried to state developers can do as they want. LOL ... CO law clearly states that they can only do as they want regarding "Reserved" items only. It absolutely AMAZED me at how many attorneys made that comment. YEP ... the door definately did not hit me in the a$$ walking out when they made that statement.
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