The Marketable Record Title Act (MRTA) and Why It’s Important for your HOA
The Marketable Record Title Act, or MRTA’s, purpose is to assist with the facilitation of real estate transactions by getting rid of any “stale” claims against real property in Florida. This is important for Homeowners Associations because the courts have concluded that covenants and restrictions of an HOA can be extinguished by the act. The general baseline has been covenants and restrictions that were more than 30 years old. This means if they are no longer enforced, the HOA does not have the authority to collect dues for common area assessments nor can they enforce use restrictions and architectural criteria against the association’s property owners.
There is a process under the MRTA that allows a residential HOA to preserve covenants and restrictions that were extinguished. In addition, Florida Statutes Chapter 720 allows an HOA to revitalize covenants and restrictions that were extinguished under the MRTA.
Amendments for 2018
Effective as of October 1, 2018, there is an amendment to the MRTA that is important for all HOAs to understand and comply with. The newly enacted amendment requires that after the annual members’ meeting — not including the organizational meeting — the homeowner’s association board will need to consider whether covenants or restrictions need to be preserved to keep the association from being extinguished under the MRTA. This means that each year the HOA must consider the impact— even in situations where the 30-years deadline is years away, or even if a preservation notice was already filed. The meeting minutes should denote that the matter was discussed and reference relevant dates and events.
The amendment will allow the HOA board to preserve the covenants for another 30 years by filing a “summary notice of preservation” in the county where the subject subdivision is located. Another option is to preserve the covenants by an amendment to them which is then indexed under the homeowner’s association’s legal name. It must reference the legal name of the property owners’ association as well as the covenant or restriction that is being preserved.
In addition, the amendment now expands the ability to revitalize covenants and restrictions to beyond HOAs, which will also allow commercial property and other non-residential associations to revitalize their covenants. This is due to an expansion in the definition of the word parcel to encompass those that are not used for residential purpose.
Retaining a Florida Homeowners’ Association Attorney
Understanding the obligations and terms of the Marketable Record Title Act and the new amendments can feel overwhelming. It’s important to ensure your HOA is in compliance with the act and how extinguishments and revitalizations work. Consulting with a Florida homeowners’ association attorney who is familiar with the MRTA and the current legislative updates is important.
At Pincus & Currier, our West Palm Beach community association lawyers are well-versed in all aspects of Florida community association laws. Our team can act as your outside counsel and provide advice and legal representation for many aspects of maintaining a community association in the state. Contact our office online or call us at 561-868-1340 to schedule an initial consultation.