With the new year well underway, homeowners’ associations’ boards of directors are holding the year’s first board meetings. While it is understandable there may be several matters a board wants to address at the first board meeting, it is important for homeowners’ associations’ boards to remember that Florida Statutes require them at the first board meeting (excluding the organizational meeting) to consider preserving the community covenants from extinguishment under the Marketable Record Title Act, often referred to as MRTA, at Chapter 712, Florida Statutes. Specifically, Section 720.303(2)(e), Florida Statutes, which is part of the Homeowners’ Association Act (HOA Act), states the following:

“At the first board meeting, excluding the organizational meeting, which follows the annual meeting of the members, the board 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, chapter 712, and to authorize and direct the appropriate officer to file notice in accordance with s. 720.3032.”

Why is this important? In short, it is a reminder to a homeowners’ association (HOA) to consider that after a certain amount of time a covenant affecting the community including the original declaration of covenants is at risk of being extinguished by MRTA. Imagine a HOA no longer able to enforce its covenants including levying assessments against some or all lots in the community because the covenants were wiped out by MRTA, for example.

The intention of MRTA is generally to extinguish stale claims on land that occurred before a root of title. According to Section 712.01(6), Florida Statutes, “‘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. The effective date of the root of title is the date on which it was recorded.” For example, a root of title is often a traditional deed that has been recorded for at least 30 years and otherwise meets the requirements of a root of title.

Covenants may be preserved in muniments of title, for example. Muniments of title have been defined as “[d]ocumentary evidence of title. The instruments of writing and written evidences which the owner of lands, possessions, or inheritances has, by which [one] is entitled to defend the title….” Black’s Law Dictionary 1019 (6th ed. 1990).” Sunshine Vistas Homeowners Assn. v. Caruana, 623 So. 2d 490, 492 (Fla 1993).

However, muniments of title (e.g., deeds) often do not sufficiently reference HOA covenants to preserve them. “…[A] general reference in any of such muniments to easements, use restrictions or other interests created prior to the root of title shall not be sufficient to preserve them unless specific identification by reference to book and page of record or by name of recorded plat be made therein to a recorded title transaction which imposed, transferred or continued such easement, use restrictions or other interests; subject, however, to the provisions of subsection (5)….” Section 712.03(1), Florida Statutes. Also, a root of title may not be the same for all lots in a community, so it is possible for a covenant to be wiped out regarding certain lots and not other lots.

In contrast, a condominium declaration is usually not at risk to be extinguished by MRTA because generally each instance a condominium unit is conveyed the declaration’s recording information is included in the legal description used. See Section 712.03(1), Florida Statutes.

The potential termination of a covenant by MRTA is generally after 30 years as measured from the root of title. Florida courts have found that HOA covenants and restrictions can be wiped out by MRTA. E.g. Lyday v. Myakka Valley Ranches Improvement Assn., Inc., 279 So. 3d 733 (Fla. 2d DCA 2019).

As such, the concern of a HOA is the risk that MRTA will extinguish HOA covenants affecting the community after 30 years. Accordingly, a HOA board considering this issue at the first board meeting is advisable, in addition to mandated by the HOA Act above.

Documenting compliance with this requirement in the board meeting’s written agenda and minutes is encouraged, as is reviewing the issue with the HOA’s attorney prior to the board meeting. But if a HOA covenant is almost 30 years old and/or the HOA wants to take action to preserve a covenant from termination by MRTA, how does a HOA do so?

As of the 2018 changes to MRTA, there are three (3) ways a property owners’ association including a HOA may preserve and protect a community covenant or restriction from extinguishment by the operation of MRTA by filing of record, at any time during the 30-year period immediately following the effective date of the root of title: (i) a written notice in accordance with Section 712.06, Florida Statutes; (ii) a summary notice under Section 720.3032(2), Florida Statutes; or (iii) an amendment to a community covenant or restriction that is indexed under the legal name of the property owners’ association and references the recording information of the covenant or restriction to be preserved. See Section 712.05(2), Florida Statutes. Each of these ways to preserve a covenant has details and formalities to consider. A property owners’ association including a HOA should consult with its attorney regarding these issues and preparation of legal documents.

HOA boards, remember each year at the first board meeting to consider preserving the covenants affecting the community or HOA from extinguishment under MRTA. The HOA Act requires it, and a HOA covenant will be 30 years old before you know it. Contact us for assistance.