Recording Governing Documents

Started by CarolynL2 • 17 replies • 3241 views

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CarolynL2 (Florida)
Posts: 73

Posted:

Okay, I'm completely confused! We are a small single family subdivision whose Association is governed by Florida Statutes Chapter 720. We have differing legal opinions on whether all the governing documents are required to be recorded in the official records of the county where the community is located. One attorney states the only document required to be recorded is the Declaration. He stated he represents many associations and very few record their Articles of Incorporation or By-laws.

Another attorney states all the governing documents are required by law to be recorded and in each members chain of title. He references F.S.720.303 and F.S.720.401.

Who is right, and why wouldn't the first attorney who has a large practice in Association law reference these statutes?

JanetB2 (Colorado)
Posts: 4,219

Posted:

Hi Carolyn:

Here is a link for the State Statutes 720:

http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0720/0720ContentsIndex.html&StatuteYear=2010&Title=%2D%3E2010%2D%3EChapter%20720

Per:

720.303Association powers and duties; meetings of board; official records; budgets; financial reporting; association funds; recalls.—
(1)POWERS AND DUTIES.—An association which operates a community as defined in s. 720.301, must be operated by an association that is a Florida corporation. After October 1, 1995, the association must be incorporated and the initial governing documents must be recorded in the official records of the county in which the community is located. …….

The “initial” governing documents must be recorded which in essence would be the Artiicle of Incorporation, By-Laws, and Declaration of CCR’s. After that time then the association would only be required to record amended Declaration of CCR’s as this document or any changes are not legally binding unless recorded.

CarolynL2 (Florida)
Posts: 73

Posted:

Janet,
I agree with you but what happens if they were not recorded and the Developer is long gone? We have a member challenging the validity of the Association because these documents were not in their chain of title.

JohnB26 (South Carolina)
Posts: 1,569

Posted:

IMO (not legal advice): if CCRs are not recorded/referrenced in a deed then they do NOT exist (for that property)

a contract only exists if ALL parties have ageed

CarolynL2 (Florida)
Posts: 73

Posted:

John,

The Declaration is recorded in the county official records,the Articles and unexecuted by-laws are not recorded in the county records. We have a member opposing the adoption of any by-laws because they give the Board of Directors rule making authority over all the property. The member opposes this as a new obligation which they did not have notice of or agree to.

Because the developer during transition passed out copies of Articles of Incorporation which were not the ones filed with the state there is some concern that the Association has been compromised. These documents should have been recorded at the county level and were required by law at the time of purchase to have been provided to the buyer. None of this happened and now we have two different attorney opinions and we want to stay out of court.

What do we do?

MelissaP1 (Alabama)
Posts: 13,836

Posted:

CC&R's are recorded at the COUNTY level. Articles of Incorporation are recorded at the STATE level. By-laws are NOT required to be filed as they are a living breathing document. Archectual Control (ACC) documentation is usually a HOA internal document controlled by it's own committee. However, I have heard that some HOA's ONLY have ACC rules and nothing else. Those are rare.

My rule of thumb is that CC&R's are the rule of the land and By-laws are the rules of who live on that land. By-laws can be modified by a simple board vote in meeting notes to officially being documented/approved. That will depend mostly on what the documents reference.

It's best to go to the Records department of your local courthouse and see the latest copy on record there. Use that copy to have a special meeting to assess the type of changes needed and how to go about making them. It could require a special meeting to 51 - 90% membership vote. Either way, it's good to discuss this with a lawyer and maybe have them help with a draft.

Former HOA President

CarolynL2 (Florida)
Posts: 73

Posted:

Melissa,
I think you missed the important issue here, which is that all initial governing documents are required by Florida law to be recorded in the official records of the county the community is located in. This is the problem. Not only are they required to be recorded they were required by law to have been given to the purchaser before they bought into the community.

DonnaS (Tennessee)
Posts: 5,671

Posted:

Carolyn,

My HOA has recorded the CC&Rs, and the Bylaws and every amendment that is ever passes in the County Clerks office. The Articles of Inc are recorded with the State of Florida but we have a copy of it also on the County's website, just in case someone wants to find it, the County level is easier to find than the States

Rules and ARC docuents are internal to the HOA and are only there for viewing. Each member of the community also has copy of them which are updated regularly.

CarolynL2 (Florida)
Posts: 73

Posted:

Donna,

Thank you for your response. The attorney who told us the initial documents were required to be recorded in the county also told us we would need 100% of the members to agree to be bound by the terms of the Articles and the new Board adopted By-laws. The other attorney stated notice was given in the Declaration that each lot owner would be a member of the HOA therefore they cannot say they are not bound by the Articles.

I tend to agree with the theory that the members who had no notice of the Articles which were filed in 1996 before the first lot was sold but which were not recorded as required by law or given to them prior to purchase as required by law have a right to vote on any term which is not included in the Declaration. I just don't know how we resolve this without going to court since we can't even get the lawyers to agree.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Hi Carolyn & Donna:

Now I know why this seemed familiar as it was also discussed here:

http://www.hoatalk.com/Forum/tabid/55/view/topic/forumid/1/postid/112460/Default.aspx

At the end of that thread we were hoping that Donna would come on line and give an opinion as she owns properties in Florida and very familiar with the statutes.

CarolynL2 (Florida)
Posts: 73

Posted:

Janet,
Hi, I took your advice and stopped worring but I also sought a second opinion of an attorney who specializes in HOA law and was told basically we have a problem.

Wonder why there isn't much more discussion about the requirement to record all initial governing documents?

JanetB2 (Colorado)
Posts: 4,219

Posted:

Hi Carolyn:

Per your above statement:

“The attorney who told us the initial documents were required to be recorded in the county also told us we would need 100% of the members to agree to be bound by the terms of the Articles and the new Board adopted By-laws. The other attorney stated notice was given in the Declaration that each lot owner would be a member of the HOA therefore they cannot say they are not bound by the Articles.”

I am not an attorney; however, I tend to agree with the second opinion.

Now, you might end up in court but from the previous thread and everything we looked at I do not really see how the HOA would lose a court battle due to the need to maintain “common area” property. Do you think the court would dissolve the HOA? If the answer is NO then it would be potentially less expensive for the HOA if possibly a homeowner is the individual who files a lawsuit. They would be the party incurring the initial bulk of the cost in attorney fees, filing, etc. At least then the court will rule and get the mess out of the way so everyone can proceed with taking care of business.

LOL … we know you have a problem, but what did the last attorney state on best and less expensive way to fix?

CarolynL2 (Florida)
Posts: 73

Posted:

There really hasn't been much advice on how to fix it. We can't dissolve the association because the streets are private and the city doesn't want them. It's kind of a well lets just wait and see what happens. So now we are preparing for the worse and 4 homes have gone up for sale.

I'll keep you posted. Each day is a new drama!

DonnaS (Tennessee)
Posts: 5,671

Posted:

Carolyn,

It might be worth while to go to the State Non Profit corp site and check to see what documets are actually filed for your HOA. Then make a call to the County Clerks office and ask to see what documents are actually filed with them. The Clerk will tell you exactually which documents are needed. Best part is that it is FREE!

The advice from lawyer number 2 is something that I am not ever heard of as for being recorded in each members chain of title. But I am not a lawyer and my Title shows no evidence of any.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Hi Donna:

Out of curiosity are you saying that your Warranty Deed does not show the HOA Covenants attached?

DonnaS (Tennessee)
Posts: 5,671

Posted:

Janet,

They are not attached.(Maybe I do not understand what you mean by attached) Upon closing, we sign a verification that we have read the CC&Rs and understand that there is a HOA and dues and assessments are required to be paid. All of the documents are required to be passed down from the previous owner or the Developer. Potential buyers may review the documents prior to finalizing the offer and that copy is either provided by the seller, the real estate agent or the developer.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Hi Donna:

As a general rule the Warranty Deed on an HOA property in many states will include verbiage after the property description such as:

… and all subsequent easements, rights of way, covenants, conditions, reservations and restrictions of record.

This would potentially be what the attorney is referencing as being recorded in the chain of title because the Title Warranty Deed makes note of the covenants … when you said your title does not show any I became curious about possible state differences.

CarolynL2 (Florida)
Posts: 73

Posted:

Donna,

Hi. Thanks again for your response. First let me say, I now have every document you can imagine that exists recorded in the City, County and State regarding the history of our subdivision.

The reason the Articles of Incorporation and By-laws are required to be in our chain of title is because of the disclosure statutes in effect when the Developer sold the property. In 1998 Florida Statute 689.26 required the Developer to provide a disclosure statement to the prospective purchaser.

689.26(1)7. THE STATEMENTS CONTAINED IN THIS DISCLOSURE FORM ARE ONLY SUMMARY IN NATURE, AND, AS A PROSPECTIVE PURCHASER, YOU SHOULD REFER TO THE COVENANTS AND THE ASSOCIATION GOVERNING DOCUMENTS.

689.26(1)8. THESE DOCUMENTS ARE MATTERS OF PUBLIC RECORD AND CAN BE OBTAINED FROM THE RECORD OFFICE IN THE COUNTY WHERE THE PROPERTY IS LOCATED.

This statute has been renumberd and is currently 720,401(1)7,8

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