For unwary homeowners’ associations, a danger is lurking beneath the water’s surface. If one is not careful, it will strike, swallowing whole a community’s restrictive covenants.
I speak, of course, of MRTA, which was enacted to simply real estate transactions. Before MRTA, a Florida parcel’s title history would theoretically need to be researched back to the initial Spanish land grants. MRTA streamlines that process, providing that certain interests in land are extinguished after 30 years, with limited exceptions, unless those interests are preserved in the manner provided by law. In essence, MRTA eliminates stale claims against property. These can include an HOA’s recorded Declaration of Covenants, Conditions and Restrictions (“CCRs”).
The yardstick for MRTA is the “root of title”. The term “root of title” means “any title transaction purporting to create or transfer the estate claimed by any person which is the last title transaction to have been recorded at least 30 years before the time when marketability is being determined.” § 712.01(6), Fla. Stat. Under MRTA, “when a record owner, alone or with its predecessors in title, has been vested with an estate in land of record for 30 years or more, such owner has marketable title free and clear of all claims [and restrictions] except matters preserved by section 712.03.” Martin v. Town of Palm Beach, 643 So. 2d 112, 114 (Fla 4th DCA 1994).
If MRTA has not already extinguished a community’s CCRs, the HOA has several options to preserve them, including:
- Formal Notice – By recording a formal notice preserving the CCRs, following written notice to each affected owner, pursuant to §§ 712.05(2)(a) and 712.06.
- Summary Notice – By recording a summary notice of preservation approved by the board of directors pursuant to §§ 712.05(2)(b) and 720.3032(2); or
- Valid Amendment – By recording an amendment to the CCRs that is indexed under the association’s legal name and that references the recording information of the CCRs to be preserved pursuant to § 712.05(2)(b).
If MRTA has extinguished the CCRs in a neighborhood, covenant revitalization is possible. §§ 720.403-720.407.
Officers and directors must be wary. They may not turn a blind eye to MRTA. The Homeowners’ Association Act now requires that each year, at its first board meeting (excluding an organizational meeting to select officers) following the homeowners’ annual meeting, the board of directors “shall consider the desirability of filing notices to preserve the covenants or restrictions affecting the community or association from extinguishment under the Marketable Record Title Act[.]” § 720.303(2)(e). Failure to do so could, in certain circumstances, be construed as a breach of the duties each association, director and officer owes homeowners.
In short, beware of MRTA. Ask your attorney to conduct a MRTA analysis. If steps have not been taken to preserve your community’s CCRs, action may be needed.