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Subject: FL Covenant Expiration MRTA
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GwenG
(Florida)

Posts:600


09/20/2019 3:17 PM  
SandieC1. It is apparent that you have gone to extraordinary efforts to ensure the continued existence of your HOA. Your concern was one that I spoke to in my previous comment. You said "The preservation process will mean that the covenants are effective under MRTA for another 30 years. HOA's must still look at the Declaration to determine if the covenants expire under their own terms at another date without an automatic renewal." I believe the wording of this caution is a bit clumsy and may have introduced some doubt. "Automatic Renewal" clauses in Declarations are outside of the statutory framework so that if the renewal of a term is withIN the 30 year MRTA period, that renewal stands, according to the actions required in the Covenants to renew or not renew. But, if the renewal clause provides for extension in excess of the 30 year statutory expiration, that renewal clause has no legal effect insofar as extending the covenants. Covenants then can only be either Preserved (if not expired) or Revitalized (if expired). MRTA trumps the Covenants and any renewals beyond 30 years. Another way to look at this is to study what is NOT written into the statute for example, that your own governing documents will supercede the provisions of the statutes under certain conditions. If that were in the statute, then one could argue that the very purpose of a MRTA law was self-imploding and allowing associations to theoretically continue covenants without end as might be the case with automatic renewal periods. Without reading too much into the author's comment, I think the difference between "preservation" and "revitalization" is being addressed by the writer. That is, a caution to be aware that some/all parcels may have already expired by Declaration OR by MRTA in which case a Preservation would not serve to continue the Covenants. (This is what happened in my HOA; covenants on 80% of parcels had been expired by MRTA and Board slandered all those titles with a Notice of Preservation. The attorney for the board did not know the law or may have thought nobody would notice.) So, if you are satisfied that NONE of the parcels subject to the Declaration expired by MRTA 30 years after the first root deed, and that all subsequent actions by Board and attorney were correct, IMO your Notice is on a solid foundation!
GenoS
(Florida)

Posts:3328


09/21/2019 10:04 AM  
MRTA was legislated into existence in 1963. Believe it or not, it was not written with HOAs in mind. HOAs got caught up in it because MRTA does speak directly to deed restrictions. Every few years some bright bulb will propose that HOAs be given an outright exemption to MRTA but that hasn't happened yet.
ChrisP12
(Florida)

Posts:15


09/21/2019 10:37 AM  
GwenG, Although I have found your posts to be very accurate in analysis and explanation, I have to disagree with your analysis on the situation that SandieC1 finds herself faced with.

SandieC1 is spot-on relative to her concern for the expiration date that is contained in the Declaration of Covenants for her community. It is important to keep in mind that the Declaration is a legally binding contract between the original developer and the property owners and between the individual property owners and is to be strictly construed by the courts.

The purpose of MRTA as you have explained is to address Declarations that automatically renew forever or have an expiration date beyond the 30 years specified in Ch. 712. The Florida State Legislature concluded that these perpetuities or long times to expiration are unreasonable for Declarations and any other claims to real property. They decided that 30 years was a reasonable length of time. As with all things legal, the devil lies in the details of the specific language used in the statute. The resolution or answer to SandieC1's concern can be found in the plain language of Ch. 712 and Ch. 720 of the Florida statutes. A close look at paragraphs 712.05, 712.11 and 720.3032 of the two chapters provides insight.

The first sentence of 712.05(1) reads: "A person claiming an interest in land or a homeowners' association desiring to preserve a covenant or restriction may preserve and protect the same FROM EXTINGUISHMENT BY THE OPERATION OF THIS ACT by filing for record, …." (Emphasis Added)

Paragraph 712.11 reads: "A homeowners' association not otherwise subject to chapter 720 may use the procedures set forth in ss. 720.403-720.407 to revive covenants that have lapsed UNDER THE TERMS OF THIS CHAPTER." (Emphasis Added)

The first sentence of 720.3032(1) reads: "Any property owners' association desiring to preserve covenants from potential termination after 30 years BY OPERATION OF CHAPTER 712 may record …." (Emphasis Added)

The question that SandieC1 must answer is whether or not the Declaration is to expire due to the OPERATION of chapter 712 or due to the plain language of the Declaration. If the February 2021 date specified in the applicable Declaration is less than 30 years from the date of the sale of the first lot sold in the community than the Declaration will expire due to operation of the governing document, the Declaration. The expiration is due to complying with the contracts' provisions and has nothing to do with the OPERATION of MRTA since 30 years have not passed. The Declaration preservation provision of Chapter 712, MRTA, is irrelevant as the Declaration isn't facing extinguishment "BY THE OPERATION OF" the MRTA act.

The conclusion is that the STATEMENT OF MARKETABLE TITLE ACTION to preserve a Declaration from being extinguished only applies if the Declaration is being extinguished by MTRA. If the expiration date specified in SandieC1's Declaration is less than 30 years from the sale of the first lot then what is the STATEMENT preserving? You can not preserve a Declaration the has already expired by its own terms, you can only "Revitalize" it after it has expired as you have discussed.

In my opinion, the STATEMENT to preserve the Declaration before MRTA has had any effect on it is an attempt by the attorney to avoid having to go through a "Revitalization". The STATEMENT has to be approved only by the Board, the "Revitalization" must be approved by a majority of the property owners. The proper way to handle the situation when the Declaration expires before it can be affected by the 30 years for MRTA is to have it expire and then go through the revitalization process.

The document recorded by the HOA is a false or fictitious claim as described in 712.08. If a property owner files suit under 712.08, the HOA will be liable for all costs, attorney fees and damages. If you haven't yet done it, you should read the appellate court decision in Busch v. Sandlake Hills.

If no property owner challenges the recorded STATEMENT within the statute of limitations time then it cannot be successfully challenged in court.
GwenG
(Florida)

Posts:600


09/21/2019 1:53 PM  
So, let me see if I follow here. So are you saying that if Sandie's parcels expire by Declaration prior to 30 years by operation of the Declaration, that they cannot be preserved from Declaration-based expiration by using MRTA notices? If for example, the first lot sold in 2000 (root) and the Covenant was set for expiration in 2021, then use of a Preservation would be improperly recorded over parcels because it does not extend an impending Covenant expiration by operation of MRTA? The Declaration would expire the lot according to the governing documents and the MRTA/HOA laws are of no effect and would not be eligible for Preservation? Thus, the HOA would be without covenants after the Declaration expired them. If this were the case, they would simply be in the catch-all common interest groups that could use the MRTA legal process to revive expired covenants (by whatever means)? Is there a timeframe to trigger a proper Notice of Preservation for Declaration-Expired parcels (as opposed to Impending MRTA expiration parcels?) It is an interesting twist and I guess I would like also to know from Sandie what was the first root deed issued by the Developer and what is the Declaration expiration date? MRTA revitalization is triggered in the event one single parcel has expired by operation of MRTA.
ChrisP12
(Florida)

Posts:15


09/24/2019 6:06 AM  
Hey GwenG, Great questions!

Questions 1, 2 & 3: My answer is YES to all. Since in the case you presented the Declaration will expire in less than 30 years by its own terms, Ch. 712, MRTA, doesn't even come into play. MRTA is only intended to limit the term/claim to a maximum of 30 years from the root of title. It is not intended to extend a Declaration expiration beyond the time that the developer/author specified.

Question 4: My answer is YES. The Declaration would have expired by its own terms and the HOA would have to go through the Revitalization process to breath new life into it and make it effective. Take a look at FS Ch. 720.404(3)(a). Why do you think the legislature put those words in the statute? To address the exact case that you have presented. The Declaration's term can be made longer during the Revitalization. If the Revitalized Declaration had the same term as the original (as a number of years and not a specific date) it would expire again before MRTA came into play and it would have to be Revitalized all over again. If the term is made to 31 years, the Declaration could be preserved in 29 years and 11 months per MRTA and it would not have to be Revitalized.

Question 5: My answer is NO. There is no provision for a notice of preservation for a Declaration that is expiring by its own terms. That would be changing the terms of the contract, a legally binding recorded instrument. If the Declaration allows amendment then it can be amended before the expiration date to put it in line with MRTA's 30 year time limit. FS Ch. 720.405(4)(c) allows a Revitalized Declaration to be changed to include an amendment provision if none existed in the original.

I am also curious as to the date the sale of the first lot was recorded to establish a root and the date of the Declaration's term (February 2021?)

Your final statement is correct and very important. When the original Declaration ceases to govern one lot it ceases to govern them all. It should be noted that a Revitalized Declaration may govern fewer parcels/lots than the original (FS Ch. 720.404(3)(c).

Be aware that I am not an attorney but have learned everything about Declarations/MRTA during my 10 year suit against an HOA for recording the MRTA preservation notice.
GwenG
(Florida)

Posts:600


09/24/2019 11:08 AM  
Good convo and food for thought for Sandie OP. I have also been involved (and prevailed) in a MRTA kerfluffle with my HOA but in my travels, have never heard of a situation such as Sandie's. The only thing that was addressed in the legal blog literature was automatic Declaration renewals that were already expired by MRTA. Such automatic renewals do not overcome the power of MRTA and that is a different situation from Sandie's (though we have not yet heard the specifics from her).
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